Mortgage Calculator

A Deeper Guide to Using This Calculator

Our tool is designed for both simplicity and power. To get the most accurate and insightful results, it helps to understand what each field represents and how it impacts your financial picture. Here is a step-by-step walk-through:

1. Home Price: This is the starting line. Enter the full purchase price of the property. This number is the foundation for all other calculations, including your loan amount and down payment.
2. Down Payment: This is your upfront investment. You can enter a flat dollar amount (e.g., $70,000) or a percentage (e.g., 20%). Notice how the other field updates automatically. A larger down payment reduces your loan amount, which lowers your monthly payment. Crucially, if you pay 20% or more, you avoid PMI (Private Mortgage Insurance), an extra fee that protects the lender.
3. Loan Term (Years): This is the marathon you're signing up for. The 30-year term is most common, offering the lowest monthly payments. A 15-year term has higher payments, but you'll build equity much faster and save a massive amount of interest over the life of the loan.
4. Interest Rate (%): This is the annual cost of borrowing the money. Even a small change here (e.g., 6.5% vs 6.75%) can have a huge impact on your total interest paid. In our 'Advanced' mode, this rate is estimated based on your credit score, but you should always get a pre-approval from a lender for the most accurate number.
5. Property Tax ($ / yr): This is one of the "hidden" costs of homeownership. Lenders will collect 1/12th of this amount from you every month. To find a good estimate, check online listings for the home (they often list annual taxes) or visit the local county assessor's website. Don't guess on this one!
6. Home Insurance ($ / yr): This is another required cost. Lenders demand you have homeowner's insurance to protect the property (and their investment). The cost varies wildly based on location (e.g., hurricane or wildfire zones are more expensive), home size, and coverage. Get a few quotes from insurance carriers to get a solid estimate.
7. Advanced: PMI (% / yr): Private Mortgage Insurance. If your down payment is under 20%, you'll likely pay this. It's an insurance policy that protects the lender. Our calculator automatically applies this based on your credit score and loan amount, and just as importantly, it stops charging you once your loan balance drops to 80% of the home price.
8. Advanced: HOA Dues ($ / mo): If you're looking at a condo, townhouse, or a home in a planned community, you will likely have Homeowners' Association dues. These monthly fees cover shared amenities and maintenance. They are a non-negotiable part of your total monthly cost and must be included in your budget.
9. Advanced: Extra Monthly Payment ($): This is your secret weapon. Any amount you add here goes 100% to principal. It's the key to paying off your loan years early and saving thousands (or tens of thousands) in interest. Try adding even $100 and watch what happens to your payoff date.

Interpreting Your Personalized Results

The numbers are calculated. Now, what do they actually mean for you? Here’s a breakdown of the results panel and how to use the data to make smarter decisions.

• Total Monthly Payment: This is your 'go/no-go' number. It's the full, all-in amount that will leave your bank account each month. You must be 100% comfortable with this figure. Pro Tip: 'Stress-test' this number. Compare it to your monthly take-home pay, not your gross salary. Can you still save money and pay for other life expenses with this payment?
• Payment Breakdown (Chart): Think of this doughnut chart as a financial x-ray of your very first payment. It's often surprising (and a little sad) to see how much goes to interest, taxes, and insurance versus the small slice that is 'principal' (the part that builds equity). Don't be discouraged! This is normal. Instead, see it as a powerful visual motivator to use the 'Extra Payment' feature.
• Loan Amortization (Chart): This is the story of your loan. This bar chart shows the multi-decade journey of your payments. You'll see that in the early years, you're mostly 'renting the money' (the interest portion is huge). But as you continue to pay, the balance tips. Watch as the 'principal' bar (the part you own) grows larger and larger, while the interest you pay shrinks. This is the magic of amortization in action.
• Loan Liability vs. Equity (Chart): This is your wealth-building chart. The 'Liability' line is your remaining loan balance, which trends down to $0. The 'Equity' area is the principal you've paid off—your stake in the home. The growing gap between those two lines is your wealth. And remember: this chart only shows equity from paying down your loan. It doesn't even include potential market appreciation, which could make your equity grow even faster.
• Mortgage Schedule (Table): This is the blueprint of your loan. For the true data-lover, this table provides the raw numbers. Toggle to the "Monthly" view to see the exact principal and interest for any payment. This is not just data; it's a planning tool. You can use it to find the exact month your PMI will be removed (when your balance hits 80% LTV) or see the precise impact of that extra $100 payment you're considering.