Mortgage Calculator
This is a typical mortgage calculator for fixed rate mortgage loan with graphing capability. This calculator is also capable of giving out either monthly or annual amortization schedule based on the loan starting date. You can also add the property taxes, pmi insurance, and all other related costs for the calculation of actual monthly out of pocket cost.
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A mortgage is a loan secured by a property, mostly a real estate property. A real estate mortgage has the following key components:
- Loan amount—the amount to be borrowed from the lender/bank. The loan amount you can borrow is normally correlated to your household income or affordability. To estimate the amount you can afford, please use our house affordability calculator.
- Down payment—the initial upfront portion of the total amount. In the United State, if the down payment is less than 20% of the total property price, a PMI (Private Mortgage Insurance) normally needs to be purchased until the principal reduced to be less than 80% of the property price. The PMI rate normally ranges from 0.5%-2% (typically 1%) of the total loan amount, depending on various factors. Beside BMI, bank normally won't give good interest rate if the down payment is less than 20%.
- Loan Terms—the length to repay the loan. Typical loan terms in the United States are 30 years, 20 years, 15 years, 10 years, 5 years, etc. Normally the shorter the loan term, the lower the interest rate.
- Interest Rate—the interest rate of a mortgage can be fixed (fixed rate mortgage or FRM) or adjustable (adjustable rate mortgage or ARM). For ARM, the interest rate is generally fixed for a period of time, after which it will periodically adjust based on some market index. ARM transfers part of the risk to the borrower, therefore the initial interest rate is normally 0.5% to 2% lower than the 30-year fixed rate.
- Repayment—the most common way to repay a mortgage loan is to make monthly fixed payments back to the lender. The payment contains both the principle and the interest. For a 30 year loan, the majority of the payments in the first few years are interest.
The total cost of owning a house is more than the monthly payment of the mortgage. When planning you should also consider the real estate tax, management fee, utilities, and house maintenance cost, etc. The annual real estate tax in the United States is very different for different locations, range from 0 to 4% of the total property value. The house maintenance cost can be expensive too. It is not uncommon to spend 1% of the total property value for repair every year.