How Much Will My Payments Be? This Mortgage Payment Calculator allows the consumer to evaluate different fixed-rate loan options. The results can be used to determine the loan term and interest rate that will be the most beneficial to them. The calculator provides a better understanding of the amortization of a fixed-rate mortgage, thereby making it easier to fully comprehend the value of one loan term and rate over another.
The monthly mortgage payment is calculated using the principal, the interest on the principal, the cost of homeowner's insurance, the cost of PMI insurance if applicable, and property taxes. A fixed-rate mortgage is one in which the term and the interest rate are predetermined at the origination of the mortgage. Typically, the term is 15 or 30 years, although 10, 20, and 25-year terms are also available.
The principal is the amount of money borrowed and the interest is the amount charged for borrowing the money. The term is the length of time that the loan is held. The lender requires insurance on the home to protect his financial investment. PMI insurance is required in some instances. PMI insurance is required when the down payment is less than twenty percent of the sale price of the home.
The interest rates offered reflect the current market at the time. In general, the shorter terms will have a lower interest rate, while the longer terms will have a higher interest rate. Additionally, the shorter loan terms will result in less money spent on interest over the lifetime of the loan, whereas the longer terms will accrue a larger portion of interest expense.
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- Amount: Enter the amount of money that you are borrowing. It may include any additional fees that you are not paying for up front at the time of settlement.
- Interest Rate: Enter the interest rate that is being charged on the loan as a percentage.
- Term: Enter the number of years that the loan will be held. Typically, this will be 30, 20, 15, or 10 years.
- Home Value: Enter the current market value of the home.
- Annual Taxes: Enter the total annual amount of property taxes, as determined by the local and state governments, that will be paid on the home.
- Annual Insurance: Enter the total amount of the annual cost of homeowner's insurance.
- Annual PMI: Enter the total cost of PMI, or private mortgage insurance, if applicable.
DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it's applicability to your financial situation. Please consult your own financial advisor.
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