Mortgage Calculator
Estimate your monthly mortgage payments with our easy-to-use calculator. Understand your principal, interest, taxes, and insurance to make informed home-buying decisions.
Calculate Your Mortgage
Payment Breakdown
Understanding Your Mortgage
Buying a home is one of the most significant financial decisions you'll ever make. Our mortgage calculator helps you understand exactly what to expect from your home loan, breaking down your monthly payments into principal, interest, taxes, and insurance.
How Mortgage Calculations Work
A mortgage payment consists of four main components, often referred to as PITI:
Principal: The amount borrowed to purchase the home. This portion of your payment directly reduces your loan balance.
Interest: The cost of borrowing money, expressed as a percentage rate. In the early years of your mortgage, most of your payment goes toward interest.
Taxes: Property taxes assessed by your local government. These are typically collected monthly as part of your mortgage payment and held in an escrow account.
Insurance: Homeowners insurance protects your property against damage, while mortgage insurance (PMI) may be required if your down payment is less than 20%.
Why Use Our Mortgage Calculator?
Our calculator provides a comprehensive view of your mortgage by including all PITI components. This gives you a more accurate estimate than calculators that only consider principal and interest.
By adjusting the different parameters, you can:
- See how a larger down payment reduces your monthly costs
- Understand how interest rates impact your total loan cost
- Compare different loan terms (15-year vs. 30-year mortgages)
- Plan for property taxes and insurance costs
- Visualize how much you'll pay in interest over the life of the loan
Tips for Home Buyers
1. Aim for 20% down payment: This eliminates the need for private mortgage insurance (PMI), saving you hundreds per month.
2. Consider shorter loan terms: While 15-year mortgages have higher monthly payments, you'll save significantly on interest and build equity faster.
3. Factor in all costs: Remember to budget for closing costs (2-5% of home price), moving expenses, and immediate home improvements.
4. Check your credit score: A higher credit score qualifies you for better interest rates. Aim for a score of 740 or above for the best rates.
5. Get pre-approved: Before house hunting, get pre-approved for a mortgage so you know exactly what you can afford.
Fixed-Rate vs. Adjustable-Rate Mortgages
Most home buyers choose between fixed-rate mortgages (FRM) and adjustable-rate mortgages (ARM). FRMs offer stability with the same interest rate throughout the loan term. ARMs typically start with a lower rate that adjusts periodically after an initial fixed period (usually 5, 7, or 10 years).
While ARMs can save money initially, they come with uncertainty about future rate increases. Our calculator assumes a fixed-rate mortgage, which is the most popular choice among homeowners.
