Mortgage Calculator
Using this free mortgage calculator, you can get an estimate of how your monthly mortgage will be.
How to Calculate your Monthly Payments using a Mortgage Calculator?
Here’s how to use a mortgage calculator to estimate your monthly payments:
Enter Your Home price within the ” Home Price” box. This is the total amount for the home you would like to purchase.
Within the box for “Down Payment”, add the total amount you will put down out of pocket towards buying the home.
Enter the interest rate percentage offered to you by your lender or bank within the box “interest rate.”
The “loan term” refers to the number of years you are given to pay back your mortgage. This can be 10, 15, 20, 25, 30-40 years.
After you have entered all these details, click on “Calculate mortgage.”
You will also be able to see the total interest rate payments accumulated, monthly, and the total principal.
Mortgage Calculator Terminologies
When buying a home using a mortgage, there are other costs associated, such as:
1. Principal:
This is the total amount you borrowed from the lender or bank, excluding interest rates and down payments.
2. Down Payment:
This refers to the portion paid out of pocket towards the home that is not financed by the mortgage.
3. Closing Costs
Closing costs are one-time fees you’ll pay when finalizing your home loan. These can include the lender’s origination fee, title services, recording fees, and other administrative charges. Typically, closing costs range from 2% to 5% of your total loan amount and are usually paid at closing.
4. Property Taxes
As a homeowner, you’re responsible for paying annual property taxes, which your local government uses to fund schools, roads, and other public services. If your lender requires an escrow account, you’ll likely pay a portion of these taxes monthly as part of your mortgage payment.
5. Homeowners’ Insurance
Homeowners’ insurance protects your home and belongings from damage due to events like fires, theft, or natural disasters. If you live in a high-risk area (such as a flood zone), you may need additional insurance coverage. Most lenders include your insurance premium in your monthly mortgage payment through escrow.
6. Mortgage Insurance
If your down payment is less than 20%, you may be required to pay private mortgage insurance (PMI) for conventional loans or a mortgage insurance premium (MIP) for FHA loans. These premiums are added to your monthly payment until you reach a certain amount of equity in your home.
How a mortgage calculator can help you?
Using our bank rate mortgage calculator, you will be able to understand how much your mortgage payments would be per month based on the interest rates and a calculation of how much you will pay long term.
Use this calculator to estimate your monthly mortgage payments, including homeowners’ insurance and property taxes. It’s a helpful way to see if your home fits within your budget or if it’s pushing your debt-to-income (DTI) ratio too high
Use the calculator to explore different down payment options and see how they impact your loan amount and monthly payments. You can also check the amortization schedule to find out when you’ll reach 20% equity—the key milestone that lets you request the removal of private mortgage insurance (PMI) on a conventional loan.
Steps on how to lower your mortgage payments
One of the best ways to lower your overall Principal and the amount you would pay in mortgage is a rule of balloon payment, which will shorten the loan terms.
Here’s what I did to lower my mortgage payments :
Total Principal was 277,200
Home cost was 128,571
The monthly payment was $770
The interest rate was 7%
The down payment was 10%
I have had a life Insurance policy since
1. I created a weekly saving challenge ($50/week)
2. Started a side hustle that generated ($300/week)
3. Instead of paying $770, I paid a lump sum of money every month that I earn from my business, savings, and side hustle.
In return, I paid at a negotiated interest rate, resulting in $121,561 in the last 7 years. Which means by year 9, with this strategy, I would complete my mortgage payments. Hence, instead of paying $770 per month for 30 years, that equals $277,200. I would only pay 156,292.725 in principal over the past 7 years.
Ultimately, if you are trying to lower the amount you pay in mortgage, it’s important that you understand that the longer you take to pay, the more interest you will pay. The great news about making balloon payments on your mortgage is that you have more equity. If you should ever need to do refinancing or even sell, then you can still make money from it.
Deciding how much house you can afford
If you’re unsure how much mortgage you can afford, start by calculating the percentage of your gross income on housing using 28% and 36% of your gross income on your total debt, including the housing payment.
Let’s say you make $90,000 per year in gross income, then your monthly income would be $7500. If you find 28% or $7500, that equals $2100. With this mortgage percentage rule, you will be able to understand what you would need to spend on your mortgage each month.
Should you take out a Mortgage or Rent?
Taking out a mortgage means that you are paying money monthly on a house that will eventually be 100% yours in a couple of years. Within the years of paying your mortgage, you gain ownership of the property, called equity. On the other hand, when you rent a house long-term, it doesn’t give you any return or ownership. The ownership belongs to your landlord.
How to get a mortgage?
Step 1: Get Financially Ready
✔️ Check your credit score
Your credit score plays a big role in the interest rate you’ll receive. A higher score could save you thousands over the life of your loan.
✔️ Know your debt-to-income ratio (DTI)
Lenders want to see that you’re not overextended. Compare your monthly debt payments to your income to get your DTI ratio—ideally under 43%.
✔️ Calculate how much you can put down
Think about how much you’ve saved for a down payment. The more you can put down, the less you’ll need to borrow—and the lower your monthly payment may be.
✔️ Create a realistic monthly budget
Factor in your income, current expenses, and future costs like property taxes and insurance. This will help you determine a comfortable monthly mortgage payment.
Step 2: Choose a Lender and the Right Loan
Compare multiple lenders
Don’t go with the first offer. Get quotes from a few lenders to compare interest rates, fees, and loan terms.
Explore different loan types
Whether it’s a conventional loan, an FHA loan, or a first-time buyer program, each mortgage type has different requirements and perks.
Get pre-approved
A pre-approval letter shows sellers you’re serious—and helps you understand how much home you can afford.
Step 3: Apply for the Mortgage
Gather your paperwork
You’ll need documents like pay stubs, W-2s, tax returns, and bank statements to verify your income and assets.
Submit your mortgage application
Complete your chosen lender’s application with all required information.
Go through underwriting
The lender will now review your financials, verify details, and assess your risk as a borrower.
Step 4: Close on Your New Home
Lock in your loan details
Secure your interest rate and review all final loan documents.
Schedule a home inspection and appraisal
These confirm the home’s condition and ensure it’s worth what you’re paying.
Pay closing costs
Expect to pay for things like title insurance, lender fees, and the home appraisal—usually 2% to 5% of the home’s purchase price.
Sign and close
Once everything checks out, sign the final documents and get the keys to your new home. Congratulations—you’re officially a homeowner!
Mortgage Rates for Different Loan Types
| Loan Type | Typical Interest Rate | Down Payment Requirement | Best For |
|---|---|---|---|
| Conventional Loan | 6.75% – 7.25% | 3% – 20% | Buyers with good credit and stable income |
| FHA Loan | 6.50% – 7.00% | As low as 3.5% | First-time buyers or lower credit score borrowers |
| VA Loan | 6.25% – 6.75% | 0% | First-time buyers or lower credit scores borrowers |
| USDA Loan | 6.50% – 7.00% | 0% | Rural and low-to-moderate income buyers |
| Jumbo Loan | 7.00% – 7.50% | 10% – 20%+ | High-value property buyers |
| 15-Year Fixed Mortgage | 6.00% – 6.50% | Varies | Buyers who want to pay off their home faster |
| Adjustable-Rate (ARM) | 6.00% – 6.75% (initial) | Varies | Buyers planning to sell or refinance in 5–7 years |
Mortgage Calculate Wrap-up
Using a mortgage calculator to check on how much a home will cost you over time can make an informed decision. The calculator is easy to use, and you can check exactly how much your monthly mortgage payments will be and the total interest payment over the loan term. It also helps you analyze how you can lower your mortgage payments by applying fewer years but higher monthly payments.
