How to calculate your mortgage paymentsThe calculus behind mortgage payments is complicated, but Bankrate's Mortgage Calculator makes this math problem quick and easy. Show
First, 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). 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). 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. You can enter either a dollar amount or the percentage of the purchase price you're putting down. 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. Finally, in the "Interest rate" box, enter the rate you expect to pay. Our calculator defaults to the current average rate, but you can adjust the percentage. Your rate will vary depending on whether you’re buying or refinancing. As you enter these figures, a new amount for principal and interest will appear to the right. Bankrate's calculator also estimates property taxes, homeowners insurance and homeowners association fees. 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. Typical costs included in a mortgage paymentThe major part of your mortgage payment is the principal and the interest. The principal is the amount you borrowed, while the interest is the sum you pay the lender for borrowing it. Your lender also might collect an extra amount every month to put into escrow, money that the lender (or servicer) then typically pays directly to the local property tax collector and to your insurance carrier.
Mortgage payment formulaWant 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
This formula can help you crunch the numbers to see how much house you can afford. 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. It's always a good idea to rate-shop with several lenders to ensure you're getting the best deal available. How a mortgage calculator can helpAs you set your housing budget, determining your monthly house payment is crucial — it will probably be your largest recurring expense. As you shop for a purchase loan or a refinance, Bankrate's Mortgage Calculator allows you to estimate your mortgage payment. To study various scenarios, just change the details you enter into the calculator. The calculator can help you decide:
Deciding how much house you can affordIf you're not sure how much of your income should go toward housing, follow the tried-and-true 28/36 percent rule. Many financial advisors believe that you should not spend more than 28 percent of your gross income on housing costs, such as rent or a mortgage payment, and that you should not spend more than 36 percent of your gross income on overall debt, including mortgage payments, credit cards, student loans, medical bills and the like. Here's an example of what this looks like: Joe makes $60,000 a year. That's a gross monthly income of $5,000 a month. $5,000 x 0.28 = $1,400 total monthly mortgage payment (PITI) Joe's total monthly mortgage payments — including principal, interest, taxes and insurance — shouldn't exceed $1,400 per month. That's a maximum loan amount of roughly $253,379. While you can qualify for a mortgage with a debt-to-income (DTI) ratio of up to 50 percent for some loans, spending such a large percentage of your income on debt might leave you without enough wiggle room in your budget for other living expenses, retirement, emergency savings and discretionary spending. Lenders don't take those budget items into account when they preapprove you for a loan, so you need to factor those expenses into your housing affordability picture for yourself. Once you know what you can afford, you can take financially sound next steps.The last thing you want to do is jump into a 30-year home loan that's too expensive for your budget, even if a lender is willing to loan you the money. Bankrate's How Much House Can I afford Calculator will help you run through the numbers. How to lower your monthly mortgage paymentIf the monthly payment you're seeing in our calculator looks a bit out of reach, you can try some tactics to reduce the hit. Play with a few of these variables:
Next stepsA mortgage calculator is a springboard to helping you estimate your monthly mortgage payment and understand what it includes. Your next step after exploring the numbers:
Mortgage calculator: Alternative usesMost people use a mortgage calculator to estimate the payment on a new mortgage, but it can be used for other purposes, too. Here are some other uses:
Terms explainedUsing an online mortgage calculator can help you quickly and accurately predict your monthly mortgage payment with just a few pieces of information. It can also show you the total amount of interest you"ll pay over the life of your mortgage. To use this calculator, you"ll need the following information: Home price - This is the dollar amount you expect to pay for a home. Down payment - The down payment is money you give to the home's seller. At least 20 percent down typically lets you avoid mortgage insurance. Loan amount - If you're getting a mortgage to buy a new home, you can find this number by subtracting your down payment from the home's price. If you're refinancing, this number will be the outstanding balance on your mortgage. Loan term (years) - This is the length of the mortgage you're considering. For example, if you're buying a home, you might choose a mortgage loan that lasts 30 years, which is the most common, as it allows for lower monthly payments by stretching the repayment period out over three decades. On the other hand, a homeowner who is refinancing may opt for a loan with a shorter repayment period, like 15 years. This is another common mortgage term that allows the borrower to save money by paying less total interest. However, monthly payments are higher on 15-year mortgages than 30-year ones, so it can be more of a stretch for the household budget, especially for first-time homebuyers. Interest rate - Estimate the interest rate on a new mortgage by checking Bankrate's mortgage rate tables for your area. Once you have a projected rate (your real-life rate may be different depending on your overall financial and credit picture), you can plug it into the calculator. Loan start date - Select the month, day and year when your mortgage payments will start. How can I pay off a 30 year mortgage in 15 years?How to Pay Off a 30-Year Mortgage Faster. Pay extra each month.. Bi-weekly payments instead of monthly payments.. Making one additional monthly payment each year.. Refinance with a shorter-term mortgage.. Recast your mortgage.. Loan modification.. Pay off other debts.. Downsize.. Is it better to get a 30 year loan and pay it off in 15 years?Is It Cheaper to Pay Off a 30-Year Mortgage in 15 Years? Some people get a 30-year mortgage, thinking they'll pay it off in 15 years. If you did that, your 30-year mortgage would be cheaper because you'd save yourself 15 years of interest payments.
What does one extra payment a year do to a 30 year mortgage?Okay, you probably already know that every dollar you add to your mortgage payment puts a bigger dent in your principal balance. And that means if you add just one extra payment per year, you'll knock years off the term of your mortgage—not to mention interest savings!
How long does it take to pay off a 30 year mortgage making double payments?The general rule is that if you double your required payment, you will pay your 30-year fixed rate loan off in less than ten years. A $100,000 mortgage with a 6 percent interest rate requires a payment of $599.55 for 30 years. If you double the payment, the loan is paid off in 109 months, or nine years and one month.
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