How to calculate a mortgage payment
You may be wondering: What will my mortgage payment be? The answer is found within a common acronym used to calculate mortgage payments: PITI, which stands for:
When you’re using a home loan calculator to determine whether you can afford a mortgage, remember to factor in the principal and interest amount you’ll owe every month, plus your estimated property taxes and homeowners insurance premiums. Your taxes and insurance are typically paid annually in a lump sum from your escrow account, but these amounts are divided by 12 and added to your monthly mortgage payment amount.
If you put down less than 20% toward your home purchase, your monthly payment will also include mortgage insurance payments.
How our home loan calculator works
Our home loan calculator helps you estimate your monthly mortgage payment amount and the total cost of your loan.
Input your home’s purchase price, loan term (15 or 30 years), expected down payment and loan start date to get a basic idea of what your monthly payment would look like.
For a more accurate estimate, click the “Advanced Options” section to input your annual home insurance premium, interest rate, property taxes and, if applicable, your monthly homeowners association fees.
Once you’ve filled out each field, the home loan calculator provides the following outputs:
- Your monthly payment amount
- Total loan amount
- Total interest paid
- Total of all payments over the life of the loan
To the right of this information, you’re provided with a visual breakdown of how each dollar of your monthly payment is applied — what goes to principal and interest, taxes, insurance, HOA fees and mortgage insurance, if applicable.
There’s also a section for extra payments. If you scroll down to “Strategies to reach your payoff faster,” you can put in a monthly, biweekly or weekly amount to pay on top of your monthly payment. The calculator tells you how these extra payments would accelerate your loan payoff and how much you’d save in interest payments.
The “Cash Bombs” section is for lump sum amounts you want to pay at a later date toward your mortgage from a bonus, inheritance or other windfall. The calculator shows you how those payments can speed up your payoff timeline and save you money.
Home Loan FAQs
How does a mortgage work?
A mortgage is a loan you borrow to finance the purchase of a home. Your home serves as collateral for the loan, and your lender charges you interest in exchange for providing the funds. You repay the loan and interest owed over an agreed-upon term. If you fail to repay the loan, your lender can repossess your home through the foreclosure process and sell it to recoup their investment.
What credit score do I need to get a mortgage?
You may qualify to get a mortgage with a credit score as low as 500, though your options will be more limited. Generally speaking, the better your credit score, the lower your mortgage rate and down payment requirements will be. Learn more about the credit score needed to buy a house.
What is a down payment?
A down payment is a homebuyer’s upfront investment in the home purchase. It’s the difference between the home price and the mortgage amount and is typically expressed as a percentage.
Can I get a mortgage with no money down?
If you live in a designated rural area or you’re a U.S. military service member or veteran, you might qualify for a mortgage with no money down. The U.S. Department of Veterans Affairs insures VA loans, which cater to members of the military, veterans and their spouses, with no down payment required. The U.S. Department of Agriculture backs USDA loans for eligible homebuyers in rural areas and require a 0% down payment.
What is a debt-to-income ratio and why does it matter when you get a mortgage?
Your debt-to-income (DTI) ratio is the percentage of your gross monthly income that is used to make monthly debt payments — for example, your auto and student loans, credit cards and mortgage. The goal is to keep your DTI ratio at or below 43% when applying for a mortgage. The less debt you’re managing with your income, the less risky you are to mortgage lenders.
How much money can I borrow with a home loan?
The answer to this question is based on your income, existing debt and other factors. A home affordability calculator can help you determine how much house you can afford.
What is a mortgage preapproval?
A mortgage preapproval provides you with the estimated loan amount and interest rate you conditionally qualify for based on a review of your overall financial and credit profile. Your lender will consider your credit history, assets, liabilities, income and other details to evaluate your ability to repay a mortgage.
What types of home loans are there?
Some common mortgage types include:
What is mortgage insurance?
Mortgage insurance protects your lender if you default on your mortgage. Homebuyers who put down less than 20% are required to pay mortgage insurance as part of their monthly mortgage payment. Conventional loans have private mortgage insurance, while loans insured by the Federal Housing Administration, or FHA, have mortgage insurance premiums that are paid upfront and annually.
Should I make biweekly mortgage payments?
Some lenders allow you to split your payment in half and pay it every two weeks, known as biweekly payments. A major perk of paying your mortgage this way is you squeeze in an extra payment each year — you make 26 half payments, which equals 13 full payments. That extra payment annually can shave a few years off of your amortization schedule.