# Mortgage Calculator

Use this free and easy mortgage calculator to estimate your monthly mortgage payments, insurance and taxes.

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$1,388 30 year fixed loan term 4.5% interest rate$
$20% of home price Monthly payment  Mortgage payment(Principal & interest)$1,013 73% Property taxes 1.3% of home price annually $20% Homeowners insurance 0.5% of home price annually$ 7% Homeowners association (HOA) fee $0% Total monthly payment =$1,388
Mortgage
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## How does this calculator work?

This mortgage calculator takes your home price, down payment, mortgage term, and interest rate, and calculates what your monthly mortgage payment should be.

You can also include your estimated property taxes, homeowners insurance, and homeowners association fee to estimate your total monthly costs associated with your home.

The primary inputs for the calculator are:

• Home price: Enter the price of the home you are considering to buy, or the value of your current home if you are refinancing.
• Down payment: Enter the down payment you plan to put into your home. If you are refinancing, enter the equity you have in your home.

The size of the mortgage you need is the difference between the home price and the down payment. Putting down 20% of the home price is common.
• Mortgage term: This is the number of terms your mortgage will last for. The most common mortgage terms are 30 years terms with a fixed interest rate. Short-terms of 10, 15, and 20 years are also available.
• Interest rate: Enter the estimated annual interest rate on your mortgage.

Using these inputs, the mortgage calculator will calculate your monthly mortgage payment.

The mortgage calculator has a few more inputs — these don’t factor into your mortgage payment, but they will into your monthly house-related payments, and will be helpful for you to know your total monthly out-of-pocket home costs.

These are:

• Property taxes: Property taxes are calculated as a percentage of your home value. For example, if your home value is $100,000 and your property taxes are 2%, then you would pay$2,000 in property taxes per year, or $167 per month. Property taxes as a percentage of home value generally ranges from 0.5% to 2.5% in the U.S. depending on your location. The average monthly property taxes paid in the U.S. is$275.
• Homeowners insurance: Homeowners insurance covers losses and damages in the event of an accident or disaster involving your home. The average monthly homeowners insurance is around \$100.
• Homeowners association (HOA) fee: An HOA fee is money you pay for certain residential properties. The fees are used to maintain and improve properties in the association.

## How to calculate your mortgage payment

We use the following formula to calculate your monthly mortgage payment.

This formula calculates the annual mortgage payment because the interest rate and the mortgage term are generally in years. The interest rate is the annual interest rate and the mortgage term is usually 30 years or 15 years.

To calculate your monthly mortgage payment, you’ll need to convert the interest rate and mortgage term into months. To do this, you’ll need to divide the interest rate by 12 (the number of months in a year) and multiple the mortgage term by 12.

For example, a 5% annual interest is equivalent to a 0.42% monthly interest (5% ÷ 12). A 30 year mortgage is the same as a 360 month mortgage (30 x 12).

• Mortgage payment: Your mortgage payment is the principal and interest that you pay each month over the life of the mortgage.
• Monthly payment: Your mortgage is not the only homeowner expense you need to pay each month. You also need to pay property taxes, homeowners insurance, and possibly a homeowners association (HOA) fee if you are part of such an association. These fees together with your mortgage payment make up your total monthly payment associated with owning a home.

## How a mortgage calculator can help

Buying a home is a big financial decision, and a big part of that decision is understanding how much you will be spending each month on your mortgage, property taxes and homeowners insurance.

Our calculator help you understand what you monthly out-of-pocket costs will likely be so you can determine your budget and make the best home purchase decision.

• Home price: Knowing your monthly payments helps you figure out what home price you can afford. If the monthly payment is too high, you may want to reduce your home price.
• Down payment: The more money you can put down, the smaller your mortgage and as a result, the small your monthly mortgage payments.
• Mortgage term: Should you take out a mortgage that has a longer term or a shorter term? Longer term mortgages have small monthly payments as compared to shorter term mortgages.

## How a mortgage calculator can help

Buying a home is a big financial decision, and a big part of that decision is understanding how much you will be spending each month on your mortgage, property taxes and homeowners insurance.

Our calculator help you understand what you monthly out-of-pocket costs will likely be so you can determine your budget and make the best home purchase decision.

• Are you buying too much house? Knowing your monthly payments helps you figure out what home price you can afford. If the monthly payment is too high, you may want to reduce your home price.
• Are you paying enough down payment? The more money you can put down, the smaller your mortgage and as a result, the small your monthly mortgage payments.
• Should you take our a longer term mortgage? Should you take out a mortgage that has a longer term or a shorter term? Longer term mortgages have small monthly payments as compared to shorter term mortgages.