Estimate your potential mortgage interest rate and monthly payment based on your credit score.
15 Years
20 Years
30 Years
Excellent (800+)
Very Good (750-799)
Good (700-749)
Fair (650-699)
Poor (600-649)
Very Poor (550-599)
Your estimated monthly payment will appear here.
Understanding Your Mortgage Payment and Credit Score
Securing a mortgage is one of the biggest financial decisions many individuals make. The monthly payment you'll owe is influenced by several key factors, and one of the most significant is your credit score. Your credit score is a numerical representation of your creditworthiness, reflecting your history of managing debt. Lenders use it to assess the risk associated with lending you money. A higher credit score generally signals a lower risk, which can translate into more favorable loan terms, including lower interest rates.
How Credit Score Affects Mortgage Rates
Mortgage lenders offer different interest rates based on the perceived risk of a borrower. Borrowers with higher credit scores (typically 740 and above) are considered less risky and often qualify for the lowest advertised interest rates. As credit scores decrease, the perceived risk to the lender increases, leading to higher interest rates. This is because borrowers with lower scores may have a history of missed payments, defaults, or high credit utilization, all of which suggest a greater likelihood of default.
For example, a borrower with an excellent credit score might qualify for a 6.5% interest rate, while a borrower with a fair credit score could face a rate of 8% or higher for the same loan amount and term. Over the life of a 30-year mortgage, this difference can amount to tens or even hundreds of thousands of dollars in extra interest paid.
Mortgage Payment Calculation
The standard formula for calculating the monthly mortgage payment (P&I – Principal and Interest) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment
P = The principal loan amount (the total amount borrowed)
i = Your monthly interest rate (annual interest rate divided by 12)
n = The total number of payments over the loan's lifetime (loan term in years multiplied by 12)
This calculator simplifies the process by using your selected credit score to estimate a corresponding interest rate. It then applies the formula above to provide an estimated monthly P&I payment. Note that this calculation excludes other costs like property taxes, homeowner's insurance, and potential Private Mortgage Insurance (PMI), which would increase your total monthly housing expense.
Using This Calculator
Enter the total loan amount you intend to borrow, the desired loan term (in years), your estimated credit score range, and your expected down payment. The calculator will then provide an estimated monthly principal and interest payment.
Loan Amount: The total price of the home minus your down payment.
Loan Term: Typically 15, 20, or 30 years. Longer terms mean lower monthly payments but more interest paid over time.
Credit Score: Select the range that best represents your credit score. This is crucial for estimating the interest rate.
Down Payment: The upfront amount you pay towards the home purchase. A larger down payment reduces the loan amount and can sometimes influence interest rates.
This tool is designed to give you a clear estimate of how your credit score can impact your potential mortgage payments. It's a valuable starting point for financial planning and understanding the impact of credit on your homeownership journey. Remember to consult with a mortgage professional for precise figures and to explore all available loan options.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var creditScore = parseInt(document.getElementById("creditScore").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var resultDiv = document.getElementById("result");
// Validate inputs
if (isNaN(loanAmount) || loanAmount <= 0) {
resultDiv.innerHTML = "Please enter a valid loan amount.";
return;
}
if (isNaN(downPayment) || downPayment < 0) {
resultDiv.innerHTML = "Please enter a valid down payment.";
return;
}
if (loanAmount <= downPayment) {
resultDiv.innerHTML = "Loan amount must be greater than down payment.";
return;
}
if (isNaN(loanTerm) || loanTerm <= 0) {
resultDiv.innerHTML = "Please select a valid loan term.";
return;
}
if (isNaN(creditScore) || creditScore = 800) {
annualInterestRate = 0.060; // 6.0%
} else if (creditScore >= 750) {
annualInterestRate = 0.063; // 6.3%
} else if (creditScore >= 700) {
annualInterestRate = 0.068; // 6.8%
} else if (creditScore >= 650) {
annualInterestRate = 0.075; // 7.5%
} else if (creditScore >= 600) {
annualInterestRate = 0.085; // 8.5%
} else { // creditScore 0) {
monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// Handle case where interest rate is 0 (unlikely for mortgage but good practice)
monthlyPayment = principal / numberOfPayments;
}
// Display the result, formatted to two decimal places
resultDiv.innerHTML = "Estimated Monthly P&I: $" + monthlyPayment.toFixed(2) +
" (Rate: " + (annualInterestRate * 100).toFixed(1) + "% based on credit score)";
}