Mortgage Loan Calculator

Mortgage FAQs

What Costs are Included In My Mortgage Payment?

Your mortgage payment(s) include your principal, interest, taxes and insurance. 

• Principal - amount you initially borrow from a lender to buy your home.
• Interest - percentage of the principal you’ll pay over the life of your loan as a fee for borrowing the money.
• Property tax - based on a percentage of your property value, and this can change from year to year depending on your local real estate market conditions – you can estimate your property tax rate by comparing your home with the property tax rate of similar homes in your area.
• Homeowners insurance -provides a safety net in case of damage to your property due to natural disaster or accidents, and the cost of homeowners insurance will vary depending on a range of factors, including the age and value of your home, location, your credit history, and more.

Will My Mortgage Payment Change Over Time?

There are several reasons why your mortgage payment may change over time. Your property taxes going up or down can cause a change in your mortgage payment, as can reassessment of your property value. You can also choose to refinance your mortgage loan, which can significantly change your mortgage payment. For example, if you shorten your 30-year loan to a 15-year loan, you will pay more on your mortgage, but you can pay off your loan faster and potentially save on interest costs.

Can I Get a Mortgage if I Have Bad Credit?

Perfect credit is not a requirement for a mortgage but improving your credit can make it easier to apply for a mortgage and help you get a more competitive mortgage interest rate. The type of credit you have, length of credit history, payment history and outstanding balances all contribute to your FICO score.

How Long Does It Take to Buy a House?

Between getting a mortgage pre-approval, shopping for a home, submitting an offer and preparing to close on a home, you could spend as little as a few weeks or several months. Getting pre-approval early on in the process is essential to being able to make an offer as soon as you find the right home. You can expect to receive your pre-approval letter about a week after you apply – from there, you can start seriously pursuing the home search.

Should I Buy a House Instead of Rent?

There are many advantages to buying a house instead of renting. Homeownership is an investment, and putting equity into a home of your own can pay off down the road as your home potentially appreciates in value. You also have more freedom to make your own decisions with homeownership – renovate, redecorate and make upgrades to your own taste, and have control over the decisions you make on your property.

How much mortgage can I afford?

Determining how much mortgage you can afford involves considering several factors, including your income, debts, down payment and the interest rate on your loan.

What is a down payment?

A mortgage down payment is the initial amount of money you pay upfront when purchasing a home. This payment is a percentage of the home’s purchase price and is combined with a home loan to cover the total cost.

How can I use a mortgage payment calculator to plan my budget?

Using a mortgage payment calculator is a great way to plan your budget and understand how much you can afford for a home. Here’s how you can use it effectively:

Steps to Use a Mortgage Payment Calculator

1. Input Loan Details: Enter the purchase price, interest rate, loan term (e.g., 30 years) and down payment amount. These are the basic inputs needed to calculate your monthly mortgage payment.
2. Review the Breakdown: The calculator will provide your estimated monthly payment.
3. Adjust Variables: Experiment with different loan amounts, interest rates and down payments to see how they affect your monthly payment and overall budget.

What are the benefits of making extra mortgage payments?

Making extra mortgage payments can provide several significant benefits.

1. Interest Savings: Extra payments reduce your principal balance, which in turn reduces the amount of interest you pay over the life of the loan.
2. Faster Loan Payoff: By paying down the principal more quickly, you can shorten the term of your mortgage and pay it off earlier than scheduled.
3. Increased Home Equity: Extra payments increase your home equity faster, which can be beneficial if you need to borrow against your home in the future.
4. Financial Flexibility: Paying off your mortgage early can free up funds for other financial goals, such as saving for retirement or investing.
5. Eliminate PMI Sooner: If you have private mortgage insurance (PMI), making extra payments can help you reach the 20% equity threshold faster, allowing you to cancel PMI and reduce your monthly payments.

You also need to consider:

• Prepayment Penalties: Check if your mortgage has any prepayment penalties, which could offset some of the benefits.
• Opportunity Cost: Consider whether the extra funds could be better used elsewhere, such as paying off higher-interest debt or investing.

How do different loan terms (15-year vs. 30-year) impact my mortgage payments and overall cost?

Choosing between different loan terms, such as a 15-year versus a 30-year mortgage, can significantly impact your monthly payments and the overall cost of your loan. Here’s how each option affects your mortgage:

15-Year Mortgage

• Monthly Payments: Higher, due to the shorter term.
• Interest Rate: Typically lower.
• Total Interest Paid: Less over the life of the loan.
• Equity Build-Up: Faster, as more of each payment goes towards the principal.

30-Year Mortgage

• Monthly Payments: Lower spread out over a longer period.
• Interest Rate: Generally higher.
• Total Interest Paid: More over the life of the loan.
• Flexibility: Greater, allowing for other financial goals or investments