The Insider Free Mortgage Calculator shows how much you’ll pay each month based on your home price, down payment, term length, and interest rate. We also provide personalized advice on how to save money on your mortgage.
Your estimated monthly payment
- Pay a 25% higher down payment would save you money $ 8,916.08 on interest charges
- Lower the interest rate by 1% would save you $ 51,562.03
- Pay an extra fee $ 500 each month would reduce the loan term by 146 month
How to calculate a mortgage payment
Wondering how our mortgage calculator calculates your monthly payment? You can calculate your monthly mortgage payment (excluding property taxes and insurance) using the following equation:
The main is the amount you borrow to buy your home. For example, if you want to buy a house for $ 400,000 and have $ 50,000 for a down payment, you will need to borrow $ 350,000. The principal of your loan is $ 350,000.
The monthly interest rate is different from the interest rate you see on your mortgage documents. The lender provides the annual interest rate, so divide that rate by 12 for this equation. If your interest rate is 4.25%, divide 0.0425 by 12 to find your monthly rate: 0.00354166%.
To find the number of months required to repay the loan, multiply the number of years by 12. If you have a 30-year mortgage, multiply 30 by 12 to get 360 months.
Once you’ve calculated M (monthly mortgage payment), you can add the monthly payment for property tax and home insurance. If you don’t have those numbers yet but want to get a feel for what you’ll pay in total each month, check out the average property taxes in your state here and the average cost of home insurance by state and home value. home here.
How a mortgage calculator can help
You entered numbers into the mortgage calculator, so what can you do with that information?
- Figure out how many homes you can afford. With our mortgage calculator, you can enter how much you want to spend on a home and how much you have available for a down payment. Together, these numbers reveal how much you need to borrow. If you find that the monthly payments are too high to live comfortably, you may decide that you need to buy a cheaper home.
- See how much you still have to save. The calculator also shows the impact of a higher or lower down payment on your monthly mortgage payments, as well as the total amount you will pay over the years.
- Choose a term of office. Enter a few term lengths to determine the one that best fits your budget. With a term of 30 years, your monthly payments will be lower, but you will pay more in the long term since you are spreading your payments over a longer period. A 15-year term will give you a higher monthly payment but cost less over the years. Play with term lengths and think about which one best suits your goals.
- Find out how your interest rate affects payments. Maybe you have been prequalified by a few lenders. Use the calculator to compare how each company’s interest rate affects your monthly and long-term payments. This tool can help you on your way to choosing a lender.
- Learn how to save money. Once you’ve entered your numbers, we’ve got a few suggestions for you on how you can either lower your monthly payments or save in the long run.
How to reduce your monthly mortgage payments
You don’t want a high mortgage payment that will cause financial hardship. There are several ways to reduce your monthly payment:
- Make a larger down payment. The higher your down payment, the less you will need to borrow.
- Buy a cheaper house. If it’s not possible to save more for a down payment, you might want to buy a home that costs less. This is another way to borrow less money with a mortgage.
- Improve your interest rate. You’ll pay less with a lower interest rate, both on your monthly and long-term payments. Shop around and get prequalification and pre-approval from several to compare interest rates. You can also take steps like increasing your credit score or paying off debt to get a better rate.
- Choose a longer duration. The longer your term of office, the lower your monthly payment will be. Keep in mind that longer terms cost more over the years, however. A 30-year term costs more in the long run than a 15-year term because you spread payments over a longer period and pay interest for longer.
A mortgage calculator can help you see all of your options for buying a home and choose the terms that best suit your situation.