Our mortgage loan calculator helps you determine your estimated monthly home loan payment. Here’s how to use it:
If you prefer to do the math yourself using a mortgage payment formula, here’s the equation embedded in the mortgage calculator that you can use to estimate your home loan payments:
A = P[r (1+r)n]/[(1+r)n-1]
A = Payment amount per period
P = Initial principal balance (loan amount)
r = Interest rate per period
n = Total number of payments or periods
Loan Product | Interest Rate | APR |
|---|---|---|
| 30-year fixed rate | 6.83% | 7.06% |
| 20-year fixed rate | 6.10% | 6.36% |
| 15-year fixed rate | 5.85% | 6.14% |
| 10-year fixed rate | 6.74% | 7.29% |
| FHA 30-year fixed rate | 6.12% | 6.79% |
| 30-year 5/1 ARM | 6.12% | 6.84% |
| VA 30-year 5/1 ARM | 5.99% | 6.21% |
| VA 30-year fixed rate | 6.00% | 6.20% |
| VA 15-year fixed rate | 5.41% | 5.76% |
The mortgage calculator estimates a payment that includes principal, interest, taxes and insurance — also known as a PITI payment. These four key components help you estimate the total cost of homeownership.
PITI breakdown:
Principal: The amount you pay each month toward your loan balance.
Interest: The amount your lender charges each month in interest fees, which are the costs associated with taking out a mortgage.
Property taxes: Our home loan calculator divides your annual property tax bill by 12 to get the monthly tax amount.
Homeowners insurance: Your annual home insurance premium is divided by 12 and added to your monthly payment.
When you take out a mortgage, you’ll need to pay closing costs, including origination fees, application fees and credit check fees. These costs are usually separate, upfront expenses, but some lenders may allow you to roll them into your mortgage. This reduces the cash amount you’ll need on closing day, but may result in higher monthly payments and increased interest costs over time.
The monthly mortgage payment on a $300,000 house would likely be around $1,981 at current market rates. That estimate assumes a 6.9% interest rate and at least a 20% down payment, but your monthly payment will vary depending on your exact interest rate and down payment amount.
Even if you have a fixed-rate mortgage, some scenarios could result in a higher payment:
There are important financial choices to make when buying a home. A mortgage payment calculator can help you decide if you should:
Amortization is the mathematical process that divides the money you owe into equal payments, accounting for your loan term and interest rate. When a lender amortizes a loan, they create a schedule that tells you when each payment will be due and how much of each payment will go to principal versus interest.
You can use a home loan payment calculator to help manage your budget and see how a monthly mortgage payment will impact your overall finances. But first, you’ll need to understand how lenders calculate what you can afford.
Lenders use your debt-to-income (DTI) ratio to decide how much to lend you. Your DTI ratio is calculated by dividing your total monthly debt — including your new mortgage payment — by your monthly pretax income.
DTI requirements vary by loan type and lender, but generally range from 41% to 45%. But if you know you can afford it and want a higher debt load, some loan programs — known as nonqualified mortgage or “non-QM” loans — allow higher DTI ratios.
Let’s say your total monthly debt is $650 and your pretax income is $5,000 per month. You’re considering a mortgage with a $1,500 monthly payment. Based on $2,150 in total monthly debt payments, your DTI ratio would be 43% ($2,150 ÷ $5,000).
Before committing to a mortgage loan, sit down with a year’s worth of bank statements to get a feel for how much you spend each month. This will give you a realistic sense of the monthly mortgage payment you could afford without stretching your finances too thin.
There are a few rules of thumb you can go by:
The answer depends on several factors, including your interest rate, down payment amount and how much of your income you’re comfortable putting toward your housing costs each month. Assuming a 6.9% interest rate and a down payment under 20%, you’d need to earn at least $150,000 a year to qualify for a $400,000 mortgage.
That’s because most lenders’ minimum mortgage requirements don’t usually allow you to take on a mortgage payment that would amount to more than 28% of your monthly income. The monthly payments on that loan would be about $3,301.
A $2,000 per month mortgage payment is too much for borrowers earning less than $92,400 a year, according to typical financial advice. How do we know? A conservative or comfortable DTI ratio is usually considered to be anywhere from 1% to 26%, if you only include mortgage debt. A $2,000 per month mortgage payment represents a 26% DTI if you earn $92,400 per year.
Try one or all of the following tips to reduce your monthly mortgage payment:
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