Our Mortgage Calculator helps estimate your monthly mortgage payments, including other related costs. You can also add extra payments or factor in annual increases for expenses like taxes and insurance. This tool is for U.S. residents only.

Mortgage Calculator Components

A mortgage typically includes these key parts, which are also used in our calculator:

• Loan Amount - The money borrowed from a lender or bank. This is the purchase price minus any down payment. Your maximum loan amount depends on your income and affordability. Use our House Affordability Calculator to estimate how much you can afford.
• Down Payment - The upfront amount paid towards the home, usually a percentage of the total price. Lenders typically prefer at least 20%, but some allow as little as 3%. If you put down less than 20%, you'll likely need Private Mortgage Insurance (PMI) until your loan balance drops below 80% of the home's price. A larger down payment can result in a lower interest rate and better loan approval chances.
• Loan Term - The number of years to repay the loan. Most fixed-rate mortgages have terms of 15, 20, or 30 years. Shorter terms, like 15 or 20 years, generally have lower interest rates.
• Interest Rate - The percentage charged for borrowing the loan. Mortgages can have a fixed-rate (FRM) or adjustable-rate (ARM). Fixed rates stay the same for the entire loan term. ARMs start with a lower fixed rate for a set period, then adjust based on market rates. The calculator only estimates fixed-rate mortgages. Interest rates are expressed as Annual Percentage Rate (APR), which reflects yearly borrowing costs. For example, a 6% APR means 0.5% interest is charged monthly.

Costs Associated with Homeownership

Your mortgage payment is a major cost of homeownership, but there are other expenses to consider. These fall into two categories: recurring and non-recurring costs.

Recurring Costs (Ongoing Expenses)

These costs continue for the life of the mortgage and usually increase over time.

• Property Taxes - A tax paid to local government, usually based on home value. U.S. property tax rates vary but average about 1.1% of the home's value per year.
• Home Insurance - Protects homeowners from damages or accidents. It can also include liability coverage for injuries that happen on the property. Costs vary by location, home condition, and coverage.
• Private Mortgage Insurance (PMI) - Required if the down payment is less than 20%. PMI protects lenders if a borrower defaults. It typically costs 0.3%-1.9% of the loan amount annually and is removed once the loan-to-value (LTV) ratio drops below 80%.
• HOA Fees - Charged by Homeowners' Associations (HOA) for maintaining shared areas in some communities. HOA fees are more common in condos, townhomes, and gated communities. They typically cost less than 1% of the home's value per year.
• Other Costs - Includes utilities, maintenance, and general upkeep. Homeowners typically spend at least 1% of the home's value annually on maintenance.

Non-Recurring Costs (One-Time Expenses)

These are upfront or occasional costs, not included in the calculator:

• Closing Costs - One-time fees paid when buying a home. These can include legal fees, title services, taxes, appraisal fees, and mortgage processing costs. Closing costs typically range from 2%-5% of the purchase price (about $10,000 on a $400,000 home).
• Renovation Costs - Some buyers choose to remodel or update their home before moving in. Common renovations include new flooring, painting, or kitchen upgrades. These costs vary based on project scope.
• Moving & Miscellaneous Costs - This includes moving services, new furniture, appliances, and repairs.

Early Repayment & Extra Payments

Some borrowers choose to pay off their mortgage early to save on interest, prepare for selling, or refinance. Our calculator allows you to factor in extra monthly, annual, or one-time payments.

Ways to Pay Off a Mortgage Faster

• Extra Payments - Paying more than the required amount each month reduces interest and shortens the loan term.
• Biweekly Payments - Instead of one monthly payment, you make half-payments every two weeks. This results in one extra full payment per year, helping you pay off the loan sooner.
• Refinancing to a Shorter Term - Switching to a shorter loan (like 15 years instead of 30) can lower the interest rate and speed up repayment. However, it often means higher monthly payments and additional closing costs.

Pros of Paying Off Early

• Lower Interest Costs - Less interest paid over the loan's lifetime.
• Faster Payoff - Clears debt sooner.
• Financial Freedom - Eliminates monthly payments, freeing up cash for other expenses or investments.

Cons of Paying Off Early

• Prepayment Penalties - Some loans charge a fee if you pay them off too quickly.
• Opportunity Cost - Money spent on early mortgage payments might be better invested elsewhere (e.g., stocks, retirement funds) with higher returns.
• Reduced Cash Flow - Extra mortgage payments lock money into your home, making it unavailable for emergencies or investments.
• Loss of Tax Deduction - In the U.S., mortgage interest is tax-deductible, but paying down your loan reduces this benefit. However, only taxpayers who itemize deductions (instead of taking the standard deduction) benefit from this.