A 5/6 ARM - which carries a fixed rate for five years, then adjusts every six months - might be the right choice if you plan to stay in your home for just a few years. Initial rates for ARMs are typically lower than those for their conventional counterparts. As rates rise, it might be tempting to choose an adjustable-rate mortgage (ARM). If you have some room in your budget, a 15-year fixed-rate mortgage reduces the total interest you'll pay, but your monthly payment will be higher. These loans come with lower monthly payments, although you'll pay more interest during the course of the loan. If your budget is fixed, a 30-year fixed-rate mortgage is probably the right call. To study various scenarios, just change the details you enter into the calculator. As you shop for a purchase loan or a refinance, Bankrate's Mortgage Calculator allows you to estimate your mortgage payment. How a mortgage calculator can helpĪs you set your housing budget, determining your monthly house payment is crucial - it will probably be your largest recurring expense. It's always a good idea to rate-shop with several lenders to ensure you're getting the best deal available. Using our Mortgage Calculator can take the work out of it for you and help you decide whether you're putting enough money down or if you can or should adjust your loan term. This formula can help you crunch the numbers to see how much house you can afford. For example, a 30-year fixed mortgage would have 360 payments (30x12=360).

Number of payments over the loan’s lifetime Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of payments for your loan. Your monthly interest rate Lenders provide you an annual rate so you’ll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. Want to figure out how much your monthly mortgage payment will be? For the mathematically inclined, here's a formula to help you calculate mortgage payments manually: Equation for mortgage payments

Mortgage insurance: If your down payment is less than 20 percent of the home's purchase price, you'll probably be on the hook for mortgage insurance, which also is added to your monthly payment.

As with property taxes, you pay one-twelfth of your annual insurance premium each month, and your lender or servicer pays the premium when it's due. If you live in a flood zone, you'll have an additional policy, and if you're in Hurricane Alley or earthquake country, you might have a third insurance policy.

Homeowners insurance: Your insurance policy can cover damage and financial losses from fire, storms, theft, a tree falling on your home and other hazards.

If you have an escrow account, you pay about one-twelfth of your annual tax bill with each monthly mortgage payment.

Property taxes: Local authorities assess an annual tax on your property.

Interest rates are expressed as an annual percentage.

Interest: This is what the lender charges you to lend you the money.

Principal: This is the amount you borrowed from the lender.

You can edit these amounts or even ignore them as you're shopping for a loan - those costs might be rolled into your escrow payment, but they don't affect your principal and interest as you explore your options. Bankrate's calculator also estimates property taxes, homeowners insurance and homeowners association fees. Your rate will vary depending on whether you’re buying or refinancing.Īs you enter these figures, a new amount for principal and interest will appear to the right. Our calculator defaults to the current average rate, but you can adjust the percentage. Next, you'll see “Length of loan.” Choose the term - usually 30 years, but maybe 20, 15 or 10 - and our calculator adjusts the repayment schedule.įinally, in the 'Interest rate' box, enter the rate you expect to pay. You can enter either a dollar amount or the percentage of the purchase price you're putting down. A down payment is the cash you pay upfront for a home, and home equity is the value of the home, minus what you owe. In the 'Down payment' section, type in the amount of your down payment (if you're buying) or the amount of equity you have (if you're refinancing). The calculus behind mortgage payments is complicated, but Bankrate's Mortgage Calculator makes this math problem quick and easy.įirst, next to the space labeled 'Home price,' enter the price (if you're buying) or the current value of your home (if you're refinancing). What to do when you lose your 401(k) match Should you accept an early retirement offer? How much should you contribute to your 401(k)?

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