free mortgage calculator

Mortgage Calculator

In the market for a new home? Use this free mortgage calculator to determine how much your monthly mortgage payment will be depending on a variety of customization options.

Mortgage Calculator Fields:

  • Home’s Purchase Price
  • Down Payment
  • Mortgage Type
    • 15-year fixed
    • 30-year fixed
    • 5/1 ARM
  • Monthly Interest Rate
  • Property Taxes
  • Homeowners Insurance
  • Homeowners Association Fees

How Much House Can I Afford To Buy?

If you first go to a lender, they will pre-approve you for an amazing amount of money. When my wife and I purchased our first house, the loan amount I was pre-approved for way more than I could afford. The reason for this was some lenders look at your gross monthly income rather than the net income. As you can imagine, this backward mentality can end up backfiring. 

Before you go house shopping or attempt to get pre-approved for a loan, look at your monthly budget and decide how much you can safely spend on your mortgage. Avoid breaking even every month with your incoming and outgoing money.

Make sure your proposed monthly mortgage payment leaves room to still pay off debt and invest for retirement. If you can’t pay off debt or invest, the mortgage is too much.

Many financial experts agree that a home mortgage should not exceed 25% of your monthly take-home pay. While personal finance is unique for each individual, avoid putting yourself in a bad financial position to pay for a home that may be larger than your budget can afford.

Using The Mortgage Loan Calculator

As you navigate the home buying process, try different loan terms. For instance, if you can’t afford to put 20% down in cash, be prepared to pay private mortgage insurance (PMI) for the life of the loan (unless you later refinance). The only way to avoid paying PMI is to ensure you are putting enough money down to reach that magical 20% number (or have at least 20% equity).

There is a significant difference between a 30 year fixed mortgage and a 15-year fixed-rate mortgage. The total monthly payment on a 15-year loan is much more than a 30 year, but you will save tens of thousands of dollars on the total interest paid and shorten the loan term. The mortgage payment calculator has extended fields to see exactly how much you are saving by altering the loan type or down payment information. 

A lower monthly payment is not always a good thing. Look at all the different variables, such as putting more money down to get a lower interest rate if your credit score is less than desirable. However, even though the latest mortgage rates are at all-time lows, paying a few extra thousand to pay down your points may be a good move.

The calculator also breaks down a monthly amortization schedule to see your payoff date if you only make the minimum monthly payment.  

Looking To Pay Your Home Off Early?

Use my mortgage payoff calculator at this link to see how quickly you could pay your mortgage off by paying extra on the principle!