Mortgage Calculator

How to calculate your payments using a mortgage calculator

Here's how to use our mortgage calculator to easily estimate payments: Enter your home price. In the Home price field, input the price of the home you're buying (or the current value of your home if you're refinancing). Enter your down payment. In the Down payment field, input the amount of your down payment (if you're buying) or the amount of equity you have (if you're refinancing). You can input either a dollar amount or percentage. Enter your loan term. In the Loan term field, enter the length of your loan — usually 30 years, but could be 20, 15 or 10. Enter your interest rate. In the Interest rate field, input the rate you expect to pay or are currently paying. Our calculator defaults to the current average rate, but you can adjust this percentage. Enter your ZIP code. In the ZIP code field, input your zip code. Click Update. Bankrate's calculator also estimates property taxes, homeowners insurance and homeowners association fees. You can edit these amounts, or even edit them to zero, as you're shopping for a loan. In addition, the calculator allows you to input extra payments (under the "Amortization" tab). This can help you decide whether to prepay your mortgage and by how much.

Typical costs included in a mortgage payment

Your mortgage payment is largely comprised of principal and interest. Here's what that means, along with other definitions related to your loan: Principal: This is the amount you borrowed from the lender, effectively your home's price minus the down payment. Interest: This is what the lender charges you to borrow the principal, or loan amount. Interest rates are expressed as an annual percentage. Down payment: This is the portion of the home's price you're not financing with a mortgage. For many borrowers, this is as little as 3 percent. Closing costs: Closing costs are one-time fees associated with getting a mortgage. They include the lender's origination fee (if it charges one), recording fees and fees for settlement and title services. Altogether, these typically run 2 percent to 5 percent of the mortgage and are usually paid by or on the day the loan closes. Property taxes: This is the tax on your home levied by your city or town, paid for as long as you own it. If your mortgage lender requires an escrow account, you'll pay a portion of your annual property tax bill with each monthly mortgage payment. Homeowners insurance: Your insurance policy helps protect you financially from damage related to covered events. If you live in a flood or other disaster-prone zone, you'll be required to have additional coverage. As with property taxes, you'll pay a portion of your annual insurance premium each month with your mortgage payment. Mortgage insurance: If you're getting a conventional or FHA loan and your down payment is less than 20 percent of the home's purchase price, you'll pay mortgage insurance premiums, which are also added to your monthly payment.

Mortgage payment formula

For the mathematically inclined, here's a formula to help you calculate mortgage payments manually:

This formula can help you crunch the numbers to see how much house you can afford. Alternatively, you can use this mortgage calculator to help determine your budget.