Calculate your mortgage payment
If you’re buying or refinancing, enter the price of your home under “Home Price”. New Loan Guide offers a refinancing calculator.
If you’re refinancing, enter the amount of your down payment. The down payment is the cash you pay upfront for the purchase of your home. Home equity is the difference between the value of the home and the amount owed.
Enter the interest rates (to the left) in desktop. To change the term of the mortgage in years, click the plus or minus symbol under “Loan Terms”.
You can find the field to enter the loan rate by tapping “Refine results” on your smartphone. Select “Loan Terms” using the plus and minus signs.
You can enter your figures if you don’t want to use The New Loan Guide’s estimations. Included are property tax, homeowners’ insurance and homeowner’s associations fees. These figures can be edited by clicking on the displayed amount.
Click on “Compare loans types to compare” to compare different loan terms. Click on “Amortization” to view the changes in principal, equity (principal repaid) and interest. Scroll down to see “Amortization” on mobile devices.
What is amortization?
Calculate a mortgage using a formula
Calculate the mortgage payment as follows: M = [ i(1+i)n] /[ (1 + in)n- 1]
The variables that are used to describe these variables include:
- M = Monthly Mortgage Payment
- P = principal amount
- Divide each monthly figure by 12 if you find the interest rates as annual figures. If you have a rate of 5%, then your monthly rate will look like this: 0.05/12= 0.04167.
- n = the number of payments over the life of the loan. If you are paying a fixed rate mortgage over 30 years, n is the number of payments made during that time.
What can a mortgage calculator do for you?
Calculating your monthly payment is an essential part of determining how much home you can afford. This monthly payment will likely be the largest part of your living costs.
New Loan Guide’s calculator lets you estimate your mortgage payment when purchasing a house or refinancing. You can change the loan information in the calculator and run different scenarios. Calculator helps you make better decisions.
- Choose the term of your home loan that suits you. A 30-year fixed-rate mortgage will reduce your monthly payment, but you will end up paying more interest over the life of the loan. Fixed-rate 15-year loan will lower your total interest but increase your monthly payments. C
- If an ARM is a good option. The interest rate on adjustable rate mortgages will increase over time. A 5/1-ARM can be a good choice if you plan to only stay in your house for a short time. You’ll want to know if interest rates are rising and how your mortgage payment is going to change after the introductory period.
- You might be buying too many houses. You can use mortgage payment calculators to determine the amount you will pay each month, after taking into consideration all costs, including taxes, insurance and private mortgage insurance.
- If you have enough money, you can get a mortgage. The minimum down payment is often only 3 percent. This makes it easier to save money. The mortgage payment calculator can help you determine the best down payment.
How lenders calculate how much you are eligible to borrow
The mortgage lender must assess your repayment ability for the amount that you wish to borrow. This assessment is based on a number of factors, but the most important one is your debt-to income ratio.
The ratio of your monthly debt payment to your income is the percentage of pre-tax income you use. Included are mortgages, auto loans, student loans, minimum credit card payment, child support, and car payments. Lenders prefer debt to income ratios that are below 36%. This is $1,800 per monthly income for $5,000.
Mortgage payment includes costs
You could use an ad-hoc mortgage calculator if your payment consisted only of principal and interest. Most mortgage payments also include additional charges. The monthly mortgage payment is made up of several components.
- Principal: The amount you owe. Each payment reduces the principal amount of your mortgage.
- The interest rate is the fee charged by the lender for a loan. Interest rates are expressed as annual percentages.
- Property taxes are assessed annually by the government on your home and land. The servicer will set up an escrow account on your behalf. Each mortgage payment is equal to a twelveth your annual tax. The loan servicer will pay the taxes as they become due.
- Homeowners insurance will cover property and financial damage due to fires, storms, and theft. This policy also covers damage caused by a tree falling on your house. Just like with property tax, you pay a monthly sum equal to a twelveth of your annual premium. The servicer then sends the bill.
- If your down payment falls below 20%, you’ll likely have to pay mortgage insurance. In the event that a borrower defaults on their loan, the lender is protected. Once your equity in your home reaches 20 percent, you can cancel the mortgage insurance.
Most homeowners associations will bill you directly. These dues are not included in your mortgage payment. HOA dues are included in the mortgage calculator of The New Loan Guide because they can be easily overlooked.
Mortgage payments can be reduced monthly
Mortgage calculator allows you to test different scenarios and see how you could reduce your monthly payment:
- You can extend your repayment term. The payment will be lower, but you’ll pay more interest. Review your repayment schedule to see the impact of extending your loan.
- Buy less house. By taking out a smaller loan, you can get a smaller mortgage payment.
- Avoid PMI. If you put down 20% or more, you won’t have to pay for private mortgage insurance. If you have 20% equity, you can refinance and avoid PMI.
- Reduce your interest rates. You can avoid PMI by paying more upfront. It will also lower your interest rate. You will then have to pay less each month for your mortgage.