Mortgage Calculator
Calculate mortgage payments, compare refinance options, determine affordability, and analyze extra payment strategies with our comprehensive mortgage calculator.
Loan Details
Additional Costs
Mortgage Tips & Insights
Smart Mortgage Strategies
- • Shop around with multiple lenders for best rates
- • Consider 15-year vs 30-year loan trade-offs
- • Factor in all costs: taxes, insurance, PMI, HOA
- • Aim for 20% down to avoid PMI
- • Get pre-approve before house hunting
- • Consider points if you'll stay long-term
Refinancing Wisdom
- • Typically worth it if rates drop by 0.5-1%
- • Consider break-even point vs. planned stay
- • Watch for closing costs (2-5% of loan amount)
- • Avoid extending term unless necessary
- • Consider cash-out only for high-value uses
- • Shop multiple lenders for best terms
Extra Payment Benefits
- • Even small extra payments make big difference
- • Target principal reduction for maximum impact
- • Consider bi-weekly payments (26 half-payments/year)
- • Make one extra payment per year
- • Apply windfalls (tax refunds, bonuses) to principal
- • Verify no prepayment penalties
Understanding Mortgages
What is a Mortgage?
A mortgage is a loan used to purchase or maintain a home, land, or other types of real estate. The borrower agrees to pay the lender over time, typically in a series of regular payments that are divided into principal and interest.
The property serves as collateral to secure the loan. If the borrower stops paying the mortgage, the lender can foreclose and take possession of the property.
Key Mortgage Components
Understanding the components of a mortgage helps you make informed decisions about your home loan. The main elements include principal, interest, taxes, and insurance (often abbreviated as PITI).
Additional costs may include private mortgage insurance (PMI), homeowners association (HOA) fees, and closing costs. These all factor into your total housing expense.
Mortgage Calculator Features
Payment Calculator
Calculate monthly payments, total interest, and view complete amortization schedules for any mortgage.
Affordability Analysis
Determine how much house you can afford based on income, debts, and down payment using industry standard ratios.
Refinance Comparison
Compare your current mortgage with refinance options to see potential savings and break-even points.
Extra Payment Impact
See how making extra payments can reduce your loan term and save thousands in interest over the life of your loan.
Types of Mortgages
| Mortgage Type | Description | Pros | Cons |
|---|---|---|---|
| Fixed-Rate | Interest rate remains constant for the entire loan term | Predictable payments, protection from rate increases | Higher initial rates than ARMs, doesn't benefit from rate drops |
| Adjustable-Rate (ARM) | Rate adjusts periodically after initial fixed period | Lower initial rates, good for short-term ownership | Payment uncertainty, potential for significant increases |
| FHA Loan | Government-backed loans with lower down payment requirements | Down payments as low as 3.5%, more flexible credit requirements | Mandatory mortgage insurance, property must meet standards |
| VA Loan | For veterans, service members, and eligible spouses | No down payment required, no PMI, competitive rates | VA funding fee, eligibility requirements, property standards |
| Jumbo Loan | Exceeds conforming loan limits set by FHFA | Finance high-value properties, competitive rates | Stricter qualification requirements, higher down payments |
Mortgage Terms Explained
Loan Components
- • Principal: The original loan amount
- • Interest: Cost of borrowing money, expressed as percentage
- • Term: Length of the loan, typically 15 or 30 years
- • Escrow: Account for property taxes and insurance
- • PMI: Private Mortgage Insurance for loans with less than 20% down
- • Amortization: Schedule of loan payments over time
Important Ratios
- • Loan-to-Value (LTV): Loan amount divided by property value
- • Debt-to-Income (DTI): Monthly debt payments divided by gross income
- • Front-End Ratio: Housing costs divided by gross income
- • Back-End Ratio: All debt payments divided by gross income
- • PITI: Principal, Interest, Taxes, and Insurance
- • APR: Annual Percentage Rate, includes fees
Mortgage Application Process
Step-by-Step Guide
1. Check your credit: Review your credit reports and scores before applying
2. Get pre-approved: Determine your budget before house hunting
3. Shop for homes: Find properties within your pre-approved amount
4. Make an offer: Submit an offer on your chosen property
5. Apply for mortgage: Complete formal application with chosen lender
6. Loan processing: Lender verifies information and orders appraisal
7. Underwriting: Final review and approval of your loan
8. Closing: Sign final documents and receive keys
Strategies to Save on Your Mortgage
Make Extra Payments
Even small additional payments toward principal can save thousands in interest and years off your mortgage. Consider bi-weekly payments (26 half-payments per year) or making one extra payment annually.
Refinance When Beneficial
Consider refinancing when rates drop significantly, your credit improves, or you want to change loan terms. Calculate the break-even point to ensure the savings outweigh the closing costs.
Choose Shorter Terms
While 30-year mortgages are popular, 15-year loans offer lower interest rates and faster equity building. The monthly payments are higher, but you'll save significantly on total interest.
Important Disclaimer
This mortgage calculator provides estimates based on the information you enter. Actual loan terms, payments, and costs may vary based on your creditworthiness, lender policies, property details, and market conditions. Always consult with qualified mortgage professionals and compare multiple loan offers before making borrowing decisions.