# Mortgage Calculator

Use our Mortgage Calculator to estimate your monthly mortgage payment. You can input a different home price, down payment, loan term and interest rate to see how your monthly payment changes.

Our monthly payment estimates are broken down by principal, interest, property taxes and homeowners insurance. We take our calculator a step further by factoring in your credit score range, ZIP code and HOA fees to give you a more precise payment estimate. You’ll also go into the homebuying process with a more accurate picture of how to calculate mortgage payments and purchase with confidence. After you run some estimates, read on for more education and homebuying tips.

## How to calculate mortgage payments

Want to figure out how much your monthly mortgage payment will be? For the mathematically inclined, here’s a formula to help you calculate mortgage payments manually:

### Equation for mortgage payments

M = P[r(1+r)^n/((1+r)^n)-1)]

• M = the total monthly mortgage payment
• P = the principal loan amount
• r = your monthly interest rate. Lenders provide you an annual rate so you’ll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. If your interest rate is 5%, your monthly rate would be 0.004167 (0.05/12=0.004167).
• n = number of payments over the loan’s lifetime. Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of total payments for your loan. For example, a 30-year fixed mortgage would have 360 payments (30x12=360).

This formula can help you crunch the numbers to see how much house you can afford. Using our mortgage calculator can take the work out of it for you and help you decide whether you’re putting enough money down or if you can or should adjust your loan term. It’s always a good idea to rate-shop with several lenders to ensure you’re getting the best deal available.

## How a mortgage calculator can help

Buying a home is the largest purchase most people will make in their lifetime, so you should think carefully about how you’re going to finance it. Setting a budget upfront — long before you look at homes — can help you avoid falling in love with a home you can’t afford. That’s where a simple mortgage calculator like ours can help.

A mortgage payment includes four components that together are known as PITI (pronounced “pity”): principal, interest, taxes and insurance. Many homebuyers know about these costs but are not prepared for are the hidden expenses of homeownership. These include homeowners association (HOA) fees, private mortgage insurance, routine maintenance, larger utility bills and major repairs.

The Bankrate Mortgage Loan Calculator can help you factor in PITI and HOA fees, but not other expenses, so make sure the monthly payment it computes for you isn’t the absolute maximum of what you’ll be able to afford. It’s important to have some cushion in your budget for unexpected or emergency costs. You also can adjust your loan and down payment amounts, interest rate and loan term to see how those variables affect your monthly payment. Your specific interest rate will depend on your overall credit profile and debt-to-income ratio, or DTI, which is the sum of all of your debts and new mortgage payment divided by your gross monthly income. A lower credit score and higher DTI can make you a riskier borrower in lenders’ eyes. Generally, the riskier you seem on paper, the higher your interest rate will be.

## Deciding how much house you can afford

If you’re not sure how much of your income should go toward housing, follow the tried-and-true 28/36 percent rule. Most financial advisers agree that people should spend no more than 28 percent of their gross income on housing (i.e., your mortgage payment), and no more than 36 percent of their gross income on total debt, including mortgage payments, credit cards, student loans, medical bills and the like.

Here’s an example of what this looks like:

Joe makes \$60,000 a year. That’s a gross monthly income of \$5,000 a month.

\$5,000 x 0.28 = \$1,400 total monthly mortgage payment (PITI)

Joe’s total monthly mortgage payments — including principal, interest, taxes and insurance — shouldn’t exceed \$1,400 per month. That’s a maximum loan amount of roughly \$253,379.

You can qualify for a mortgage with a DTI ratio of up to 50 percent for some loans, but you might not have enough wiggle room in your budget for other living expenses, retirement, emergency savings and discretionary spending if you stretch yourself too thin. Lenders don’t take those budget items into account when they preapprove you for a loan, so it’s up to you to factor those expenses into your housing affordability picture for yourself.

Knowing what you can afford can help you take financially sound next steps. The last thing you want to do is jump into a 30-year home loan that’s too expensive for your budget, even if a lender is willing to loan you the money.

## Next steps

A mortgage calculator is a springboard to helping you estimate your monthly mortgage payment and understand what it includes. Your next step after playing with the numbers: get preapproved by a mortgage lender.

Applying for a mortgage will give you a more definitive idea of how much house you can afford after a lender has vetted your employment, income, credit and finances. You’ll also have a clearer idea of how much money you’ll need to bring to the closing table.

Learn more about specific loan type rates
Loan Type Purchase Rates Refinance Rates
The table above links out to loan-specific content to help you learn more about rates by loan type.
30-Year Loan 30-Year Mortgage Rates 30-Year Refinance Rates
20-Year Loan 20-Year Mortgage Rates 20-Year Refinance Rates
15-Year Loan 15-Year Mortgage Rates 15-Year Refinance Rates
10-Year Loan 10-Year Mortgage Rates 10-Year Refinance Rates
FHA Loan FHA Mortgage Rates FHA Refinance Rates
VA Loan VA Mortgage Rates VA Refinance Rates
ARM Loan ARM Mortgage Rates ARM Refinance Rates
Jumbo Loan Jumbo Mortgage Rates Jumbo Refinance Rates

## About our Mortgage Rate Tables

• The above mortgage loan information is provided to, or obtained by, Bankrate. Some lenders provide their mortgage loan terms to Bankrate for advertising purposes and Bankrate receives compensation from those advertisers (our "Advertisers"). Other lenders' terms are gathered by Bankrate through its own research of available mortgage loan terms and that information is displayed in our rate table for applicable criteria. In the above table, an Advertiser listing can be identified and distinguished from other listings because it includes a "Next" button that can be used to click-through to the Advertiser's own website or a phone number for the Advertiser.

Each Advertiser is responsible for the accuracy and availability of its own advertised terms. Bankrate cannot guaranty the accuracy or availability of any loan term shown above. However, Bankrate attempts to verify the accuracy and availability of the advertised terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. Click here for rate criteria by loan product.

Advertisers may have different loan terms on their own website from those advertised through Bankrate.com. To receive the Bankrate.com rate, you must identify yourself to the Advertiser as a Bankrate.com customer. This will typically be done by phone so you should look for the Advertiser's phone number when you click-through to their website. In addition, credit unions may require membership.

If you are seeking a loan for more than \$424,100, lenders in certain locations may be able to provide terms that are different from those shown in the table above. You should confirm your terms with the lender for your requested loan amount.

The loan terms (APR and Payment examples) shown above do not include amounts for taxes or insurance premiums. Your monthly payment amount will be greater if taxes and insurance premiums are included.

If you have used Bankrate.com and have not received the advertised loan terms or otherwise been dissatisfied with your experience with any Advertiser, we want to hear from you. Please click here to provide your comments to Bankrate Quality Control.

#### Quality Assurance

Compare rates with confidence. Rates are accurate and available as of the date seen for Bankrate customers. Identify yourself as a Bankrate consumer to get the Bankrate.com rate.

## Mortgage calculator: Alternative uses

Most people use a mortgage calculator to estimate the payment on a new mortgage, but it can be used for other purposes, too.
Here are some other uses:
1. Planning to pay off your mortgage early.

Use the "Extra payments" functionality of Bankrate's mortgage calculator to find out how you can shorten your term and save more over the long-run by paying extra money toward your loan's principal. You can make these extra payments monthly, annually or even just one time.

To calculate the savings, click the "Amortization / Payment Schedule" link and enter a hypothetical amount into one of the payment categories (monthly, yearly or one-time), then click "Apply Extra Payments" to see how much interest you’ll end up paying and your new payoff date.

2. Decide if an ARM is worth the risk.

The lower initial interest rate of an adjustable-rate mortgage, or ARM, can be tempting. While an ARM may be appropriate for some borrowers, others may find that the lower initial interest rate won't cut their monthly payments as much as they think.

To get an idea of how much you'll really save initially, try entering the ARM interest rate into the mortgage calculator, leaving the term as 30 years. Then, compare those payments to the payments you get when you enter the rate for a conventional 30-year fixed mortgage. Doing so may confirm your initial hopes about the benefits of an ARM -- or give you a reality check about whether the potential plusses of an ARM really outweigh the risks.

3. Find out when to get rid of private mortgage insurance.

You can use the mortgage calculator to determine when you’ll have 20 percent equity in your home. That’s the magic number for requesting that a lender waive its private mortgage insurance requirement. If you put less than 20 percent down when you purchased the home, you’ll need to pay an extra fee every month on top of your regular mortgage payment to offset the lender’s risk. Once you have 20 percent equity, that fee goes away, which means more money in your pocket.

Simply enter in the original amount of your mortgage and the date you closed, and click "Show Amortization Schedule." Then, multiply your original mortgage amount by 0.8 and match the result to the closest number on the far-right column of the amortization table to find out when you'll reach 20 percent equity.

## Mortgage calculator help

Using an online mortgage calculator can help you quickly and accurately predict your monthly mortgage payment with just a few pieces of information. It can also show you the total amount of interest you"ll pay over the life of your mortgage. To use this calculator, you"ll need the following information:

Home price - This is the dollar amount you expect to pay for a home.

Down payment - The down payment is money you give to the home's seller. At least 20 percent down typically lets you avoid mortgage insurance.

Mortgage Amount - If you're getting a mortgage to buy a new home, you can find this number by subtracting your down payment from the home's price. If you're refinancing, this number will be the outstanding balance on your mortgage.

Mortgage Term (Years) - This is the length of the mortgage you're considering. For example, if you're buying a home, you might choose a mortgage loan that lasts 30 years, which is the most common, as it allows for lower monthly payments by stretching the repayment period out over three decades. On the other hand, a homeowner who is refinancing may opt for a loan with a shorter repayment period, like 15 years. This is another common mortgage term that allows the borrower to save money by paying less total interest. However, monthly payments are higher on 15-year mortgages than 30-year ones, so it can be more of a stretch for the household budget, especially for first-time homebuyers.

Interest Rate - Estimate the interest rate on a new mortgage by checking Bankrate's mortgage rate tables for your area. Once you have a projected rate (your real-life rate may be different depending on your overall financial and credit picture), you can plug it into the calculator.

Mortgage Start Date - Select the month, day and year when your mortgage payments will start.

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