Mortgage Calculator
Estimate. Compare. Mortgage Made Easy.
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Loan Details
Results
| Loan Amount | $0.00 |
| Down Payment | $0.00 |
| Loan Term | 0 years |
| Interest Rate | 0% |
| Property Tax Rate | 1.2% |
| Property Tax | $0.00/month |
| Home Insurance | $0.00/month |
| PMI | $0.00/month |
Understanding Your Mortgage
What is a Mortgage?
A mortgage is a loan specifically used to purchase real estate, where the property itself serves as collateral for the loan. The borrower agrees to pay back the loan amount plus interest over a set period of time through regular monthly payments.
Key Mortgage Terms
- Principal: The original amount of money you borrow to buy your home.
- Interest: The cost of borrowing money, expressed as a percentage rate.
- Term: The length of time you have to repay the loan (typically 15 or 30 years).
- Amortization: The process of paying off your loan through regular payments over time.
- Down Payment: The initial payment you make when purchasing a home, usually a percentage of the home price.
How Mortgage Payments Work
Each mortgage payment consists of four components, often referred to as PITI:
- Principal: The portion that reduces your loan balance.
- Interest: The cost of borrowing the money.
- Taxes: Property taxes that are often collected with the payment.
- Insurance: Homeowner's insurance (and possibly PMI if your down payment was less than 20%).
This calculator focuses on principal and interest payments. In the early years of your mortgage, most of your payment goes toward interest. As time passes, more of your payment goes toward reducing the principal.
How Interest Rates Affect Your Payment
Even small differences in your interest rate can significantly impact your monthly payment and the total amount you'll pay over the life of the loan. For example:
- A $300,000 loan at 3.5% for 30 years would have a monthly payment of $1,347 and total interest of $184,968.
- The same loan at 4.5% would have a monthly payment of $1,520 and total interest of $247,220.
That's a difference of $173 per month and $62,252 in total interest!
The Power of Additional Payments
Making even small additional principal payments can significantly reduce the total interest you pay and shorten your loan term. For example, adding $100 to each monthly payment on a $300,000 loan at 4% could save you $33,000 in interest and pay off your loan 4 years early.
Frequently Asked Questions
It helps you estimate monthly costs, plan your budget, and make better financial decisions when buying or refinancing a home.
Principal, interest, property taxes, homeowners insurance, and possibly PMI (if your down payment is under 20%).
PMI (Private Mortgage Insurance) protects the lender if you default on your loan. It's usually required if you put down less than 20%.
- Increase your down payment
- Choose a longer loan term
- Shop for a lower interest rate
- Remove PMI by refinancing or paying down principal
Yes! You can enter estimates for property taxes and insurance to get a full picture of your monthly costs.
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