Calculate Mortgage Refinance or Home Purchase Payments
Run some numbers and see what is comfortable for you. Our Mortgage Payment Calculator allows you to easily determine what your monthly payments would be on a fixed-rate mortgage of a given amount, length (term) and interest rate. It also takes into account property tax, homeowner's insurance and private mortgage insurance (PMI) information to provide you with the most accurate calculation possible of what your mortgage payments would be.
Because you also enter the property value, the calculator can let you know if you're going to need PMI or not. If you do, it calculates the length of time you'll need to have PMI based on the regular amortization of the loan, that is, over the course of time through making regular payments. (PMI is required if you make a down payment of less than 20 percent or have less than 20 percent equity when refinancing; it may be canceled once you exceed 20 percent equity). But you will need to prove current value.
FAQ: Great tool for anyone refinancing or buying a home. Are you refinancing or purchasing a home? If so, this is a good way to change terms of a prospective loan length and learn what payment may work best for you.
How to calculate mortgage payments
To use the Mortgage Payment Calculator, start by entering:
- the amount you wish to borrow
- the interest rate
- the length of the loan in years and
- value of the property
The last of these is used to determine if you need to pay for PMI or not, and if so, how long you will need to carry it.
Click next, than on the next page, enter annual costs of:
- property taxes
- homeowner's insurance and
- private mortgage insurance (PMI)
Note that you can enter these either as a dollar amount or as a percentage of the loan amount.
It's ok to estimate these last three if you don't have exact figures, but the more accurate these figures are, the more accurate your monthly mortgage payment calculation will be. You can get property tax information from the clerk's office of the community the home is located in and an estimate for homeowner's insurance from any insurance company.
PMI varies according to your credit score and the size of your down payment, but is usually an annual charge of 0.5%-1.0% of the loan amount. There are other PMI options that include a slightly higher interest rate which eliminates monthly or annual charges. Ask a Loan Officer about these options. For a more precise estimate, you can look up the "PMI rate charts" or "PMI rate tables" that many mortgage insurance companies maintain online.
FAQ: There are other PMI options that include a slightly higher interest rate which eliminates monthly or annual PMI charges. Have you checked with your lender on these options?
Customize Loan Terms for Affordability
Even if you decide to do a normal mortgage loan term such as a 30 year or a 15 year fixed rate mortgage, you can still use our calculator to run various scenarios on specific terms to see what that payment would be. You can use this tool to calculate say a 10 year term or a 22 year term payment etc. (using that payment number to pay that additional amount to the lender servicer).
FAQ: For example, you decide on a 30 year fixed rate loan and want to pay it off in 20 years. Calculate the 30 year payment then change the term to 20 years and see what the payment difference is. Pay that additional difference each month to the lender servicer and the loan will be paid off in 20 years instead of 30 years.
More ways to use the Mortgage Payment Calculator
There are several ways to use the standard Mortgage Payment Calculator aside from simply determining what a mortgage refinance or a home purchase of a certain loan amount and interest rate will cost you. You can vary the interest rate slightly to see the impact of rate fluctuations and how much you might save or pay more if rates change before you lock your rate. You can vary the loan amount to see how changing the size of your down payment would affect your monthly payment. You can compare monthly payments for different homes at different prices.
You can also see how shortening or lengthening the loan term (the time it takes to pay off the mortgage) affects the monthly payment. Because shorter-term mortgages have lower rates than longer ones do, and paying off a loan faster reduces interest compounding, the monthly payments for a shorter-term mortgage may be less than you expect.
FAQ: Explore all the various options with this Tool. Buying a home or refinancing to a lower mortgage rate or shorter loan term? Get the numbers and see what is most comfortable for you.