MORTGAGE CALCULATOR
Mortgage Help: Understand Your Monthly Mortgage Payment
Planning your home purchase starts with understanding how your mortgage payment is calculated. This mortgage help guide breaks down each part of your monthly payment so you can confidently estimate costs, compare loan options, and decide how much home you can afford before applying for a mortgage.DOWN PAYMENT
Your down payment is the amount you pay upfront when buying a home. While many buyers believe a 20% down payment is required, many mortgage programs allow as little as 3%–3.5% down, depending on the loan type and buyer qualifications.
A larger down payment can:
- Lower your monthly mortgage payment
- Reduce your total loan amount
- Help you avoid private mortgage insurance (PMI)
- Increase your home buying power
Use this calculator to see how different down payment amounts affect your monthly payment and long-term costs.
LOAN TERM
Your loan term is the length of time you have to repay your mortgage. Common options include 30-year fixed, 20-year, and 15-year fixed loans.
Shorter loan terms typically:
- Have lower interest rates
- Result in higher monthly payments
- Save you money on interest over time
Longer loan terms usually:
- Offer lower monthly payments
- Increase total interest paid over the life of the loan
Adjust the loan term to compare payment scenarios and find the best balance for your budget.
LOAN TYPE
Your loan type determines how your interest rate is structured and how your payments behave over time.
Fixed-Rate Mortgages
Fixed-rate loans keep the same interest rate for the entire loan term. This provides predictable monthly payments and long-term stability, making them a popular choice for buyers planning to stay in their home long-term.
Adjustable-Rate Mortgages (ARMs)
Adjustable-rate mortgages start with a lower introductory interest rate for a set period, then adjust annually. For example, a 5/1 ARM has a fixed rate for the first five years before adjusting each year after that. These loans can be beneficial for buyers who plan to sell or refinance before the rate adjusts.
INTEREST RATE
Your interest rate plays a major role in determining your monthly mortgage payment and total loan cost. This calculator uses an estimated average mortgage rate, but your actual rate will depend on factors such as:
- Credit score
- Down payment amount
- Loan type and term
- Market conditions
Even a small change in interest rate can significantly impact your monthly payment, so it’s important to compare scenarios.
PROPERTY TAX RATE
Property taxes are often included in your monthly mortgage payment and are based on the home’s assessed value and local tax rates. This calculator provides an estimated property tax amount, which you can adjust in the advanced options for a more accurate estimate.
HOME INSURANCE
Homeowners insurance is typically required by lenders and helps protect your home and belongings from damage or loss. Insurance costs vary based on the home’s location, value, and coverage level. You can adjust this estimate in the calculator’s advanced options to reflect your expected insurance premium.
HOA FEES
Some homes, such as condos or planned communities, include homeowners association (HOA) fees. These monthly fees help cover shared maintenance, amenities, and community services. HOA fees are added to your monthly housing cost and should be considered when calculating affordability.