Mortgage Calculator

---

How to Use the Mortgage Calculator

Our mortgage calculator helps you estimate your monthly payment and understand the long-term costs of a home loan. Here’s how to use it:

• Home Price ($): The full purchase price of the home.
• Down Payment ($): The amount of money you'll pay upfront. This is subtracted from the home price to determine the loan amount.
• Interest Rate (%): The annual interest rate for the mortgage. Use a current, realistic rate for an accurate estimate.
• Loan Term (Years): The length of the loan. 30 years is the most common, but a shorter term like 15 years will save you a significant amount in interest.

Understanding the Concepts Behind Your Mortgage

A mortgage payment is more than just a single number. It's made up of several components that are important to understand.

PITI: The 4 Elements of a Mortgage Payment

Your total monthly housing expense is often referred to as PITI. Our calculator estimates the first two components (P&I). When budgeting, you must also account for the last two.

• Principal (P): The portion of your payment that goes directly to paying down your loan balance.
• Interest (I): The portion of your payment that goes to the lender as a fee for borrowing the money.
• Taxes (T): Property taxes, which are collected by your lender and paid to your local government. These can be a significant recurring cost.
• Insurance (I): Homeowners insurance, which protects your home against damage. If your down payment is less than 20%, this also includes Private Mortgage Insurance (PMI).

Amortization: How Your Loan is Paid Off

The "Amortization Schedule" shows how your loan is paid off over time. You'll notice that in the early years of your mortgage, a much larger portion of your payment goes towards interest. As you continue to make payments, the balance shifts, and more of your money goes towards paying down the principal. This is why a 15-year loan saves so much money in interest compared to a 30-year loan—you spend less time in those interest-heavy early years.

What To Do With Your Results

This calculator is a powerful tool for planning your financial future. Here’s how to use the information:

Experiment with the Inputs

See for yourself how small changes can have a big impact. How does a 1% higher down payment affect your monthly payment? How much interest do you save by choosing a 15-year loan instead of a 30-year? Understanding these trade-offs is key to making a smart decision.

Shop Around for the Best Rate

The interest rate is not set in stone. A lower rate can save you tens of thousands of dollars over the life of the loan. Compare offers from at least 3-4 different lenders to ensure you're getting the best possible deal.

Budget for the Full Cost of Homeownership

Remember PITI. Your monthly mortgage payment is just one piece of the puzzle. Be sure to factor in property taxes, homeowners insurance, potential HOA fees, and a budget for regular maintenance and repairs.