# What is a Monthly Mortgage Payment Calculator?

Contents

- What is a Monthly Mortgage Payment Calculator?
- Monthly Mortgage Payment Calculator
- How to calculate mortgage payments
- Understand monthly mortgage amortization schedule
- Monthly Amortization Calculator Mortgage
- How to Use Our Mortgage Payment Calculator
- Mortgage calculator definitions
- Home Price
- Down Payment
- Loan Amount
- Mortgage Rate
- Loan Term
- Mortgage payment schedule
- Monthly Mortgage Payment Calculator Frequently Asked Questions
- How is principal and interest calculated?
- How is mortgage interest calculated per month?

A Monthly Mortgage Payment Calculator will help you figure out how much your monthly mortgage payment will be based on the applicable data, such as loan amount, rate, number of years of mortgage, etc. When entering the data that is relevant to your situation, the mortgage calculator will give you the payment based on that data.

Estimated monthly payments typically include principal, interest, property taxes, and homeowners insurance. By showing additional options like credit score, ZIP code, and HOA fees, you will get a more precise payment estimate. This will enable you to enter the homebuying process with a more accurate understanding of how to calculate mortgage payments and make a confident purchase.

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## How to calculate mortgage payments

Using a mortgage calculator is the simplest way to calculate your mortgage payment. Simply, put the desired data and the mortgage calculator will determine the mortgage payment based on that data. Keep in mind, the numbers you receive from the mortgage calculator are only as good as the data. So, if your rate, taxes, insurance or any of the other data is not accurate, your mortgage payment won’t be accurate either. Always talk with an experienced loan officer to ensure your estimate for the rate, taxes and insurance are accurate.

## Understand monthly mortgage amortization schedule

In regards to mortgages, amortization refers to the process of repaying your mortgage debt over time through regular monthly payments. Assuming you have a 30-year fixed-rate mortgage, the term “amortization” refers to the 30 year period in which that debt is paid off with regular monthly payments over that 30 year period.

With a fixed-rate loan, your payments will be relatively steady because your interest rate will not change. If your property taxes or insurance costs rise or fall, your payment will as well unless escrows are not included in the payment

.

A variable-rate mortgage operates in a different way. The interest rate on this sort of loan is fixed for a set number of years, usually 5 or 7. Following that period, your rate will fluctuate based on the performance of whichever economic index your loan is linked to, depending on the sort of ARM you chose. This means that beyond the fixed period, your rate may increase or decrease, resulting in a change in your monthly payment.

With ARMs, there is some uncertainty because after the initial fixed period expires, you never know how much your mortgage payment will increase. This is why some borrowers convert their adjustable-rate mortgages to fixed-rate mortgages before the fixed period expires. The advantage of an ARM is that the starting interest rate is usually lower than a fixed-rate loan, saving you money over the course of the fixed period. People who plan to move or refinance before the fixed period ends may benefit from ARMs.

An amortization schedule, often known as an amortization table, details how your mortgage is broken down between principal and interest. The table will show you how much of your monthly payment will go toward paying down the principal balance of your loan and how much will go toward interest. Keep in mind, the majority of your payment will go toward interest when you initially start paying your mortgage. After a few years of payments, this will begin to change, with the majority of your payments moving toward reducing your principal balance. An amortization table will also show you the starting balance of your monthly mortgage payment and the remaining balance after you’ve made your payment.

## Monthly Amortization Calculator Mortgage

Mortgage payment calculators are computer programs that allow users to calculate the financial consequences of changing one or more variables in a mortgage financing scenario. Consumers use monthly mortgage payment calculators to calculate monthly payments and ensure they are looking in a price range they can afford. Mortgage lenders use mortgage calculators regularly to determine payments, debt to income ratios and make sure both are within the underwriting guidelines. Many online sites have mortgage calculators available for public use but be careful when inputting your contact information because that information will be sold as a lead to mortgage companies.

The loan balance, interest rate and total number of payments are all important elements to consider when calculating a mortgage. Other costs linked with a mortgage, such as property taxes and insurance, can be calculated using more advanced calculators. Portable Financial calculators like the HP-12C and the Texas Instruments TI BA II Plus have additional mortgage calculation features. There are also a plethora of free online mortgage calculators and software packages available that perform financial and mortgage calculations.

## How to Use Our Mortgage Payment Calculator

We have included a mortgage payment calculator on the above page for your use and to help determine approximate payments. Once inputting the basic data that is applicable to your particular situation, the calculator will give the payment based on the information submitted. Always change the data so that you have numbers from multiple scenarios in case the rate or mortgage amount is different. This will give you a mortgage payment range so that you are prepared for differences between your numbers and the actual number.

Mortgage calculators can be used to answer questions like: What will the monthly payment be if one borrows $250,000 at a 7% annual interest rate and repays the loan over thirty years, with $3,000 in annual property taxes, $1,500 in annual property insurance, and 0.5% in annual private mortgage insurance? $2,142.89 is the correct answer.

An online mortgage calculator can be used to determine how much property a potential borrower can afford. The person’s total monthly income and total monthly debt payments will be used to determine the total debt to income figure for the lender. A mortgage calculator can assist in calculating all sources of income and comparing them to all monthly debt payments. When calculating the monthly debts, don’t forget to add the taxes, insurance and homeowner association dues. Additionally, properties that are in a flood zone, will require flood insurance and that is a figure that will need to be included. Lenders prefer that the total mortgage payment is roughly around 35% of the total pretax income and the total debts including the mortgage payment don’t exceed 50%. But, these figures can vary depending on the loan type and the borrower’s overall credit profile. Some scenarios and loan programs will allow for the total debt to income ratio up to 55% if the overall credit profile is strong enough.

## Mortgage calculator definitions

### Home Price

The amount of money needed to purchase the house.

### Down Payment

The down payment is the amount of money the borrower wants to put down to purchase the home or the required amount by the lender. Normally, this can be inputted as a dollar amount or a percentage. The mortgage amount will cover the difference between the down payment and the home price.

### Loan Amount

The loan amount is the dollar figure that will be financed. So, the home or purchase price, minus the down payment equals the loan amount.

### Mortgage Rate

The interest rate on a mortgage is known as the mortgage rate. Mortgage rates are set by the lender and can be fixed or variable, with the latter adjusting once the fixed period ends. Mortgage rates fluctuate daily and are dependent on a borrower’s credit history, the loan scenario, and loan type.

### Loan Term

The length of the mortgage is referred to as the loan term. For example, the most common loan terms are 10 year, 15 year, 20 year, and 30 year. Make sure you input the loan term properly. Some mortgage calculators will ask for the loan term in months and some in years. So, a 30 year loan term expressed in months would be 360.

### Mortgage payment schedule

A mortgage payment schedule is a detailed table of periodic loan payments that shows the amount of principal and interest that each payment consists of until the loan is paid off at the end of the term. For each period, each periodic payment equals the same total amount.

However, on the mortgage payment schedule or Amortization Schedule, the majority of the payment in the beginning of the term is applied to interest. Later in the schedule, the percentage of the payment going to principal vs interest will change with the majority of the payment being applied to principal. However, all numbers on the mortgage payment schedule will change if extra mortgage payments are made.

## Monthly Mortgage Payment Calculator Frequently Asked Questions

### How is principal and interest calculated?

The principal (initial amount borrowed) and interest payment is calculated by inputting those two figures (amount borrowed and interest rate), along with the mortgage term, into the mortgage calculator and that figure is the principal and interest payment.

### How is mortgage interest calculated per month?

Your mortgage interest is usually computed on a monthly basis. At the conclusion of each month, your bank will multiply the outstanding loan amount by the interest rate that applies to your loan, then divide that amount by 12.