Mortgage Payment Calculator
Estimated Monthly Breakdown
Principal & Interest:
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Property Tax (Monthly):
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Home Insurance (Monthly):
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Total Monthly Payment:
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Loan Amount:
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Total Interest Paid (Over Term):
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Understanding Your Mortgage Calculation
Purchasing a home is one of the most significant financial decisions you will make. This Mortgage Calculator helps you estimate your monthly payments by factoring in the home price, down payment, interest rate, and additional costs like property taxes and homeowners insurance.
Components of a Mortgage Payment
Your monthly payment is typically comprised of four main parts, often referred to as PITI:
- Principal: The portion of the payment that reduces the loan balance.
- Interest: The cost of borrowing money, determined by your interest rate.
- Taxes: Property taxes assessed by your local government, usually paid into an escrow account.
- Insurance: Homeowners insurance to protect against damage, also typically paid via escrow.
How Interest Rates Affect Affordability
Even a small difference in interest rates can have a massive impact on your monthly payment and the total cost of the loan. For example, on a $300,000 loan, a 1% increase in interest rate can raise your monthly payment by hundreds of dollars and cost tens of thousands more over the life of a 30-year loan.
The Role of the Down Payment
The down payment is the initial upfront amount you pay for the home. A larger down payment reduces the principal loan amount, which lowers your monthly payments. Additionally, putting down 20% or more typically allows you to avoid Private Mortgage Insurance (PMI), further reducing your monthly costs.
30-Year vs. 15-Year Mortgages
While a 30-year mortgage offers lower monthly payments due to the extended timeframe, you will pay significantly more in interest over the life of the loan. Conversely, a 15-year mortgage has higher monthly payments but allows you to build equity faster and save on total interest costs.