If you are planning to pursue a mortgage soon, one thing you may be wondering about is all of the options available to you. Mortgages come in all shapes and sizes, and it can be confusing when trying to figure out the best one for your future home. In order to get the best rate, it is crucial that you do as much detailed research as you can, including using a mortgage calculator.
When you are calculating your budget for your home mortgage, it is very important that you have a set budget and search for a mortgage that fits within your financial guidelines. While you may find a bank or financial institution that is willing to give you a loan for your home, the amount of interest they charge can make your payment jump significantly. The importance of knowing your mortgage rate and how it will affect your overall payment is imperative.
Thankfully, we have made this process virtually painless with our free mortgage payment calculator tool. We want to assist you in making the best decision for your budget and your mind. Our free mortgage calculator can help you accurately estimate your mortgage expenses so that you can be in charge of your payments.
Understanding Our Calculator
Our free mortgage calculator is here to help simplify the process of choosing the best mortgage for you. It helps you understand what factors affect your mortgage payment so that you can be confident in your choice of mortgage. It will help you understand how large of a home you can afford or how a mortgage refinance will affect your budget.
Using our calculator could not be easier. You simply need to input your information into each section of the calculator, and press the Calculate Now button. It is as simple as that!
You will need to input the following information when using the mortgage calculator:
- The amount of the mortgage in the proper denomination
- The amortization period
- The interest term
- The interest type
- The interest rate
- The loan term
- The start date of the loan
You can mix and match different variables based on the loan options you are considering. You can use this calculator as often as you need in order to get the most accurate idea of what your mortgage interest is going to cost. It couldn’t be easier!
Frequently Asked Questions
How should I use this mortgage calculator?
A home is one of the largest purchases many people will make in a lifetime. It is important to be able to calculate what your payments will be as well as how much you can afford. This calculator should be used to get an estimate of how much your mortgage will cost over the life of the loan. You can also change your figures to see how much you will pay if you add additional payments outside of the regular monthly payment.
How do I calculate the mortgage amount?
There are several ways you can calculate your mortgage amount. If you have a specific home in mind, you can use the selling price as a starting point. You may end up with an amount that is less if you negotiate a lower price with the seller.
You can also seek pre-approval from your lender. The financial institution will tell you exactly how much they are willing to lend you for a home based on your income, credit score, and other factors. You can enter this amount into the mortgage calculator tool in order to see how much your payments will be.
If you have not been pre-approved for a mortgage and do not have a home in mind, do some research into the market in which you plan to buy. Decide on the type and size home you want to purchase and find look at what homes are selling for in that area. This will give you a base idea of how much your loan should be.
What determines the amortization period?
An amortizing loan is one where the principal of the loan is paid down over the life of the mortgage. Your amortization is based on an amortization schedule. This schedule will be comprised of equal payments of both interest and principal over the life of the loan. Your amortization period will be determined based on the length of time on the loan you choose. Most loans have an amortization period of 15 to 30 years, but you can work with your lender if you want to use a different amortization table.
What determines the loan term?
A loan term refers to the frequency of payments on a loan. Most mortgages have a loan term of 30 days, or one month. Your lender will determine your loan term.
However, you have the option to make additional payments each month above your regular scheduled payment. Our mortgage payment calculator can help you determine how much more quickly you can pay off your loan if you decide to make two or more payments a month, thus saving you interest.
Which interest type is better?
The interest type of the loan is ultimately going to depend on your personal preference. There are pros and cons to both types of loans. A variable interest rate is a loan that is charged interest on the outstanding balance based on the current market interest rates. A fixed interest rate is a loan that has a constant interest rate that doesn’t change over the life of a loan.
A variable interest rate home loan is ideal if the market conditions remain low or unchanged. The downside to a variable rate is a much higher interest payment should the volatility of the economic climate becomes increased. However, studies show that over time, the borrower will likely pay less interest with a variable rate.
A fixed rate loan is defined as a loan that retains the same interest rate during the entire amortization period. The benefit to this is the fact that your payment will never be any higher. On the contrary, your payment will never be any lower as can often happen with variable interest rates.
You can test both interest types and their impact on your payments using our mortgage calculator.