About the Mortgage Payment Calculator
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 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).
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
- the 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, then 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. For a more precise estimate, you can look up the "PMI rate charts" or "PMI rate tables" that many mortgage insurance companies maintain online.
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 of a certain 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.