Mortgage Calculator​

Use our mortgage calculator to find out an estimate of your monthly mortgage payment. You can input a different home price scenarios such as a different, down payment, loan term, interest rate, until you find a suitable mortgage payment for you.

You will also get monthly payments broken down by principal and interest, property taxes, and home insurance.
This information will help you to go into the home-buying process prepared and more confident, knowing how much you can afford to pay. After you learning this information read our home buyer’s guides to find home-buying tips and techniques that will make you a savvy home buyer.

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Mortgage Loan Document Checklist:

Find out what documents you’ll need to apply for a mortgage.


    Mortgage Summary :
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    Mortgage monthly payment 101

    What’s included in the monthly mortgage payment?

    A mortgage is a long-term loan you get from a lender so you can buy a house; the cost to it is that you have to pay interest on the loan. This means that for every mortgage payment you make, a portion goes to paying down the principal of the loan and the remaining portion goes to covering interest on the loan.

    PITI: Mortgage Payment Components Four factors play the main role in the mortgage payment calculation. I like to think of them as the four horsemen of homeownership. These are:

    PITI = Principal + Interest + Tax (property tax) + Insurance (home insurance & mortgage insurance)

    Here is in detail what each of them represent.

    Principal

    The principal is the original amount of money you borrowed. For example, let’s say you bought a house for $600,000 with 10% down and got a loan for the remaining $540,000; the amount of your principal is $540,000, and you will pay interest of that amount.

    Mortgage loans are structured in a way so that you pay more interest in the earlier years of the mortgage; this is because in the earlier stages of the loan the amount you owe is higher. However, as the loan amount is decreased, a bigger portion of what you pay goes directly to covering the principal of the loan.

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    As you can see in the above table, you more in interest in the earlier years that later on, which means as time goes by, a bigger portion goes towards the principal.

    Interest

    Lenders loan you money because they make money on what they lend to you; the money they make comes in the form of interest. So if you get a loan for say $500,000 at the rate of 3% with 30-year amortization; that means you will pay 3% per year on the amount owed.

    The higher the interest rate, the higher your mortgage payments are going to be. Using our earlier example of a $500,000 30-year loan at the rate of 3% it’d mean a mortgage payment of $2,458 per month. The same loan with a 3.5% interest rate results in a monthly payment of $2,595 per month.

    Mortgage interest rates are constantly changing, which means if interest rates go up, your mortgage payment goes up as well. In some cases it may be cheaper to go with a variable rate; the problem is those rates could change unexpectedly while your income remains fixed. This is why it is smart to choose a fixed interest rate; that way you know how much you’ll need to pay.

    Other monthly homeownership costs

    In addition to paying the principal and interest of the mortgage, the other two main costs that come with owning a home are property tax and home insurance.

    PITI = Principal + Interest + Tax (property tax) + Insurance (home insurance & mortgage insurance)

    Some lenders require you to pay for property taxes and home insurance directly to though them; your lender collects those payments, and then they submit the amounts to the city for property taxes, and to the insurance company for home insurance when the payments are due.

    The reason some lenders do that is because they want to make sure you are paying your property taxes and that the home is insured.

    Property Tax

    Property taxes are fees the local municipality charges to real estate property owners; the city or town uses the money to pay for public services like public schools, police service, fire-fighter service, and other local public services.

    The benefit of paying your property taxes through your lender is that it makes it easier to pay those fees. With every mortgage payment, you pay a portion of your property taxes on top of the mortgage payment.

    The lender collects that money and keeps it in a holding account; when payments are due, the lender takes that money and pays your property taxes. Out of sight, out of mind. That’s easy!

    Home Insurance

    When you get a mortgage to buy a home, the lender will want to make sure the home is insured. Two types of insurance may be required; the first one is home insurance and this protects the home and its` contents from fire or other natural disasters. If you`re getting a mortgage, you must buy home insurance.

    The second type of insurance is mortgage insurance; this protects the lender in case you default on the loan. If your down payment is less than 20% of the purchase price, you will need to pay for mortgage insurance.

    How can I lower monthly mortgage payment?

    You can use this mortgage calculator to work out different scenarios so you can find out what monthly mortgage payment works best for you.

    Here are some simple ways you can reduce your mortgage payment:

    • Get a better interest rate. Negotiating a better interest rate not only means you pay less money in interest, your mortgage payment will go down as well. You will also be able to afford a bigger mortgage with a lower interest rate.

    • Get a better interest rate. Negotiating a better interest rate not only means you pay less money in interest, your mortgage payment will go down as well. You will also be able to afford a bigger mortgage with a lower interest rate.

    To get a better interest rate, go online and find the lowest mortgage interest rate lenders are offering online; then get quotes from three to five of your favourite lenders.

    The last step is the easiest one, pick the lender that offers you the best rate and ask them for an even better rate using as a reference the rate you found online.

    • Buy a less expensive home. Make sure your new home becomes a blessing and not a source of stress; this is best achieved by buying a home you can comfortably afford. If the mortgage payment represents more than 1/3 of your gross income you should consider buying a less expensive house.

    • Extend the mortgage term. When you get a 25-year mortgage term that means that it will take you 25 years to pay off the loan; change that to 30 years and your monthly mortgage payment amount will drop significantly.

    However, keep in mind that the longer the mortgage term is the longer you will take to pay off the loan, and the more interest you will pay over the life of the loan.

    • Increase the amount of your down payment. When you increase the amount of the down payment the required loan amount decrease; this means your mortgage payment goes down.

    Home buyers that put a down payment of 20% or more are not required to pay for mortgage insurance which will significantly reduce the amount of what you have to pay.

    How does the interest rate affect my mortgage loan?

    Before you lock in an interest rate, it’s worth knowing that high interest rates bring higher monthly payments and increase the amount of interest you’ll pay over the life of your loan. In contrast, a low interest rate saves you money in both the short and long term.

    Mortgage Calculator Uses

    Using a mortgage calculator is the best and fastest way to get an idea of what your mortgage payment will be and the type of mortgage you can afford. You can also quickly find out how much you will pay in interest over the life of the mortgage.

    Calculate Different Scenarios

    With this mortgage calculator you can try different scenarios and see what your monthly mortgage payment will be. You can change the home price, the interest rate, amortization period, and more.

    You can also type a lower or higher down payment to see how it impacts your monthly mortgage payment and compare that amount to what you have budgeted.

    Understand Your Mortgage Payment

    Only a portion of your monthly payment goes towards paying down the mortgage loan; a big part of that goes towards covering interest fees on the loan. Most mortgage payments cover the principal and interest (P&I); others include costs paid through the lender such as home insurance, and property taxes.

    All four costs combined are referred to as PITI (principal, interest, property taxes, and home insurance).

    Compare Different Mortgage Types

    In case you are not sure what type of mortgage works best for you, our mortgage calculator allows you to try out different options such as different interest rates, or different terms like a 30-year mortgage.

    Calculate Your Down Payment

    The higher your down payment the lower the monthly mortgage payment is going to be. Using this mortgage calculator you can change the home price to see how it impacts the amount of the mortgage payment so you can determine if you can afford it.

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