The calculus behind mortgage payments is complicated, but Bankrate's Mortgage Calculator makes this math problem quick and easy.
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.
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.
Want 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
- M = the total monthly mortgage payment
- P = the principal loan amount
- r = your monthly interest rate. Lenders provide you an annual rate so you'll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. If your interest rate is 5%, your monthly rate would be 0.004167 (0.05/12=0.004167).
- n = number of payments over the loan's lifetime. Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of total payments for your loan. For example, a 30-year fixed mortgage would have 360 payments (30x12=360).
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.
