Under “Mortgage Amount,” enter the price (if you’re buying) or the current value.

Under “Interest rate” (to the right), enter the rate. This is the amount provided by the banks. Right now the Interest rate is 2.99% and it is set as default at this moment but you can adjust it to the interest rate you will obtain.

Under “Down payment,” enter the amount of your down payment (if you’re buying) or the amount of equity you have (if refinancing). A down payment is the cash you pay upfront for a home, and home equity is the value of the home, minus what you owe.

Under “Loan term,” decide if you want to have the loan calculated in years or in months and add the length of the mortgage.

The mortgage calculator lets you send the report to your email as well. Enjoy!!

The mortgage payment calculation looks like this:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

The variables are as follows:

• M = monthly mortgage payment
• P = the principal amount
• i = your monthly interest rate. Your lender likely lists interest rates as an annual figure, so you’ll need to divide by 12, for each month of the year. So, if your rate is 5%, then the monthly rate will look like this: 0.05/12 = 0.004167.
• n = the number of payments over the life of the loan. If you take out a 30-year fixed rate mortgage, this means: n = 30 years x 12 months per year, or 360 payments.

Determining what your monthly house payment will be is an important part of figuring out how much house you can afford. That monthly payment is likely to be the biggest part of your cost of living.

Using my mortgage calculator will let you estimate your mortgage payment when you buy a home or refinance. You can change loan details in the calculator to run different scenarios. The calculator can help you decide:

• The home loan term length that’s right for you. 30 years fix rate lower your monthly payment, but you’ll pay more interest over the life of the loan. A 15 year fixed rate mortgage reduce the total interest you’ll pay, but your monthly payment will be higher.
• If an ARM is a good option. Adjustable rate mortgage start with a “teaser” interest rate, and then the loan rate changes — higher or lower — over time. You’ll want to be aware of how much your monthly mortgage payment can change when the introductory rate expires, especially if interest rates are trending higher. A fix interested rate is the best way to go!!
• Are you buying a house that’s out of you budget? The mortgage payment calculator can give you a reality check on how much you can expect to pay each month, especially when considering all the costs, including taxes, insurance and private mortgage insurance. You can always check my free Budget Planner Calculator to see: where you stand financially, this will show you your income minus expenses.
• Are you putting enough money down? With minimum down payments commonly as low as 3%, it’s easier than ever to put just a little money down. The mortgage payment calculator can help you decide what the best down payment may be for you.

• Mortgage lenders are required to assess your ability to repay the amount you want to borrow. A lot of factors go into that assessment, and the main one is debt-to-income ratio.Your debt to income ratio is the percentage of pretax income that goes toward monthly debt payments, including the mortgage, car payments, student loans, minimum credit card payments and child support. Lenders look most favorably on debt-to-income ratios of 36% or less — or a maximum of $1,800 a month on an income of $5,000 a month before taxes.
  • » MORE: You can always check my free Budget Planner Calculator to see: where you stand financially, this will show you your income minus expenses.

Here are the key components of the monthly mortgage payment:

• Principal: This is the amount you borrow. Each mortgage payment reduces the principal you owe.
• Interest: What the lender charges you to lend you the money. Interest rates are expressed as an annual percentage.
• Property taxes: The annual tax assessed by a government authority on your home and land. You pay about one-twelfth of your annual tax bill with each mortgage payment, and the servicer saves them in an escrow account. When the taxes are due, the loan servicer pays them.
• Homeowners insurance: Your policy covers damage and financial losses from fire, storms, theft, a tree falling on your house and other bad things (there are additional fees/terms depending on where the property is located). As with property taxes, you pay roughly one-twelfth of your annual premium each month, and the servicer pays the bill when it’s due.
• Mortgage insurance: If your down payment is less than 20% of the home’s purchase price, you’ll likely pay mortgage insurance. It protects the lender’s interest in case a borrower defaults on a mortgage. Once the equity in your property increases to 20%, the mortgage insurance is canceled, unless you have an FHA Loan backed by the Federal Housing Administration.

Typically, when you belong to a homeowners association, the dues are billed directly, and it’s not added to the monthly mortgage payment. Because HOA dues can be easy to forget. Also some properties you can also find a CDD Community Development District the same would apply to the HOA process.

The mortgage calculator lets you test scenarios to see how you can reduce the monthly payments:

• Extend the term (the number of years it will take to pay off the loan). With a longer term, your payment will be lower but you’ll pay more interest over the years.
• Buy a less expensive house. Taking out a smaller loan means a smaller monthly mortgage payment.
• Avoid paying PMI. With a down payment of 20% or more, you won’t have to pay private mortgage insurance. Similarly, keeping at least 20% equity in the home lets you avoid PMI when you refinance.
• A good idea. Add an extra payment throughout the year this would go directly to the initial loan!!!

Get a lower interest rate. Making a larger down payment can not only let you avoid PMI, but reduce your interest rate, too. That means a lower monthly mortgage payment.

Your monthly payment can go up over time if:

• Property taxes or homeowners insurance premiums rise. These costs are included in most mortgage payments.
• You incur a late payment fee from your mortgage loan servicer.
• You have an adjustable-rate mortgage and the rate rises at the adjustment period.