Mortgage Cal : How to calculate mortgage payments

mortgage cal

To quickly calculate your monthly mortgage payment, which includes principle and interest as well as estimates for PMI, property taxes, home insurance, and HOA dues, use Zillow’s mortgage calculator. To determine your projected mortgage payment with an itemized breakdown and schedule, enter the cost of a home and the amount of a down payment. To better suit your situation, modify the loan’s terms.

How to calculate mortgage payments

You can personalize your mortgage information using Zillow’s mortgage calculator while making educated guesses for variables you may not fully understand. The house loan calculator is simple to use and can always be updated thanks to these autofill features.

Remember, your monthly house payment includes more than just repaying the amount you borrowed to purchase the home. The “principal” is the amount you borrowed and have to pay back (the loan itself), and the interest is the amount the lender charges for lending you the money.

For most borrowers, the total monthly payment sent to your mortgage lender includes other costs, such as homeowner’s insurance and taxes. If you have an escrow account, you pay a set amount toward these additional expenses as part of your monthly mortgage payment, which also includes your principal and interest. Your mortgage lender typically holds the money in the escrow account until those insurance and tax bills are due, and then pays them on your behalf. If your loan requires other types of insurance like private mortgage insurance (PMI) or homeowner’s association dues (HOA), these premiums may also be included in your total mortgage payment.

Home price

The price is either the amount you paid for a home or the amount you may pay for a future home purchase.

Down payment

Most home loans require at least 3% of the price of the home as a down payment. Some loans, like VA loans and some USDA loans allow zero down. Although it’s a myth that a 20% down payment is required to obtain a loan, keep in mind that the higher your down payment, the lower your monthly payment. A 20% down payment also allows you to avoid paying private mortgage insurance on your loan.

Loan program

Your loan program can affect your interest rate and total monthly payments. Choose from 30-year fixed, 15-year fixed, and 5-year ARM loan scenarios in the calculator to see examples of how different loan terms mean different monthly payments. Learn more about loan types below.

Interest rate

Mortgage interest is the cost you pay your lender each year to borrow their money, expressed as a percentage rate. The calculator auto-populates the current average interest rate.

PMI

Private Mortgage Insurance (PMI) is calculated based on your credit score and amount of down payment. If your loan amount is greater than 80% of the home purchase price, lenders require insurance on their investment. This is a monthly cost that increases your mortgage payment.

Property taxes

Your estimated annual property tax is based on the home purchase price. The total is divided by 12 months and applied to each monthly mortgage payment. If you know the specific amount of taxes, add as an annual total.

Home insurance

Homeowner’s insurance is based on the home price, and is expressed as an annual premium. The calculator divides that total by 12 months to adjust your monthly mortgage payment. Average annual premiums usually cost less than 1% of the home price and protect your liability as the property owner and insure against hazards, loss, etc.

HOA dues

Homeowners in some developments and townhome or condominium communities pay monthly Homeowner’s Association (HOA) fees to collectively pay for amenities, maintenance and some insurance. Update to include your monthly HOA costs, if applicable. If there are no HOA costs, you can leave the field blank.

Type of home loans to consider

The loan type you select affects your monthly mortgage payment. Explore mortgage options to fit your purchasing scenario and save money.

Conventional loan (conforming loan)

Conventional loans are backed by private lenders, like a bank, rather than the federal government and often have strict requirements around credit score and debt-to-income ratios. If you have excellent credit with a 20% down payment, a conventional loan may be a great option, as it usually offers lower interest rates without private mortgage insurance (PMI). You can still obtain a conventional loan with less than a 20% down payment, but PMI will be required.

FHA loan (government loan)

An FHA loan is government-backed, insured by the Federal Housing Administration. FHA loans have looser requirements around credit scores and allow for low down payments. An FHA loan will come with mandatory mortgage insurance for the life of the loan.

VA loan (government loan)

VA loans are partially backed by the Department of Veterans Affairs, allowing eligible veterans to purchase homes with zero down payment (in most cases) at competitive rates. You won’t pay PMI, but VA loans do require a funding fee.

USDA loan (government loan)

The United States Department of Agriculture backs USDA loans that benefit low-income borrowers purchasing in eligible, rural areas. Credit requirements are loose on USDA loans. While an upfront funding fee is required on these loans, your down payment can be as little as zero down without paying PMI.

Jumbo mortgages (non-conforming)

Jumbo loans are named based on the size of the loan. When a loan exceeds a certain amount (the conforming loan limit), it’s not insured by the Federal government. Loan limits change annually and are specific to the local market. Jumbo loans allow you to purchase more expensive properties but often require 20% down, which can cost more than $100,000 at closing. Rates are competitive.

Start your home buying research with a mortgage calculator

A mortgage payment calculator is a powerful real estate tool that can help you do more than just estimate your monthly payments. Here are some additional ways to use our mortgage calculator:

  1. Assess down payment scenarios

Adjust your down payment size to see how much it affects your monthly payment. For instance, would it be better to have more in savings after purchasing the home? Can you avoid PMI? Compare realistic monthly payments, beyond just principal and interest.

  1. Calculate mortgage rates

Modify the interest rate to evaluate the impact of seemingly minor rate changes. Knowing that rates can change daily, consider the impact of waiting to improve your credit score in exchange for possibly qualifying for a lower interest rate. Click the “Schedule” for an interactive graph showing the estimated timeframe of paying off your interest, similar to our amortization calculator.

  1. Evaluate affordability

Fine-tune your inputs to assess your readiness. Use our affordability calculator to dig deeper into income, debts and payments.

  1. Sample loan programs

Adjust the loan program to see how each changes monthly mortgage payments

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