Helping you plan your home improvement project, from start to finish

Mortgage Calculator

Use the ImproveNet home loan calculator to estimate your monthly mortgage payment. To calculate, enter the price of your home, down payment, and loan details. Subscribe to our weekly newsletter to receive more home improvement tips.

Close Advanced

Tip: use the advanced controls if you want to add insurance, taxes or HOA dues to the total.

Total Monthly
Principal & Interest:
Private Mortgage Insurance:
Property Taxes:
Homeowners Insurance:
HOA Dues:
This is the amount you pay each month that goes toward paying down the principal of your loan and the cost of borrowing (interest). This is the premium for the insurance policy for FHA loans if your down payment is less than 20%. These are the taxes you are required to pay as a property owner, levied by your city or municipality. This is a standard insurance policy that covers damage to your property and the possessions you keep on it. These are the fees used by a homeowners association towards maintenance of common areas used by all homeowners in a housing development or complex.

This is an estimate. Your monthly payment may vary.

Your Next Step:

Get accurate quotes. It's free!

Buying Guide and Mortgage Calculator for New Homeowners

The prospect of owning a home is exciting, but there's a lot to know about buying and owning a home. One of the first hurdles that prospective homeowners face is financing. The mortgage process can seem complicated, especially for those just beginning to explore their borrowing options. Knowing what you can afford and planning for your financial obligations is essential, and we can help you understand everything you need to know. Our estimated mortgage payment calculator is designed to help you know exactly what your obligation will be, including the monthly payments and total loan amount, so you can buy a house with confidence. But before you're ready to buy, make sure you understand the terms people use when they talk about home financing.

What Is the Difference Between a Loan and a Mortgage?

Some people may use the terms "mortgage" and "loan" interchangeably, but these terms aren't completely synonymous. When you take out a mortgage on a home, you are using the home as collateral for the loan. If you don't make your mortgage payments and you default, the lender can take the home to satisfy the mortgage. A loan usually involves a smaller amount of money, and this loan is often unsecured. This means that you have not pledged any collateral for the loan. Most people use a loan to pay for home improvements, kitchen remodeling, or a bathroom renovation project.

How Is a Monthly Mortgage Calculated?

Before you proceed with a mortgage, it's important to use a monthly mortgage payment calculator so you understand the terms of your financial obligation. Lenders calculate principal and interest payments by using a mathematical formula in combination with the loan terms. For example, with a fixed-rate, 30-year mortgage, the calculation is based on the assumption that the borrower will maintain the loan for the full loan term. The monthly principal and interest payment will be calculated using the loan amount, the loan term, and the interest rate. For an adjustable-rate mortgage, the initial monthly payments would be calculated using the interest rate at the start of the mortgage. When the interest rate changes, monthly payments would be recalculated using the new rate. An online mortgage calculator makes this recalculation simpler.

What Is the Formula for Calculating Monthly Mortgage Payments?

The formula for a fixed-rate mortgage would be payment equals loan amount divided by discount factor, which is calculated using the total number of payments to be made over the term of the mortgage and the periodic interest rate. Because this can be a complicated mathematical process, it's much easier to just use a home mortgage calculator to figure out your monthly payments. The formula for an adjustable-rate mortgage involves finding the number of payments to be made and creating an amortization schedule for the time remaining on the mortgage. Calculate using the outstanding loan balance as the loan amount, entering the current interest rate. A detailed mortgage calculator will greatly simplify this process for you.

What Percentage of Income Should Go to a Mortgage Payment?

Knowing the percentage of income that will need to be reserved for a mortgage payment is an important detail before embarking on the mortgage process. Lenders' guidelines will vary, but the percentage used to determine affordability of debt ranges between 25 and 36 percent. This means that your total amount of debt should fall somewhere between 25 and 36 percent of your total gross income. This debt amount includes all credit cards, student loans, auto loans, home insurance, medical bills, and the mortgage.

What Is a Good Rule of Thumb for How Much House I Can Afford?

Mortgage lenders will analyze several factors as they determine whether to approve a loan. These factors include your credit score, income stability, income size, and down payment amount as well as the value of the home. One common rule of thumb is to multiply your gross annual income by 2.5 or 3 to arrive at a rough estimate of an appropriate home price. This calculation also assumes a 20 percent down payment and only a moderate amount of other long-term debts, such as student loans and car payments. Those with no other debts might be able to afford a house that is four or possibly five times their annual gross income.

How Will I Know How Much House I Can Afford?

One of the best ways of knowing how much house you can afford is to use an estimated mortgage payment calculator. Understanding what you'd be paying each month is crucial for your overall comfort and confidence in the process. The amount of money you earmark for your house payment will also vary depending on how much money you want to be able to save or invest each month. Many advisers recommend that consumers have a minimum of three months of their monthly expenses set aside to use if an unexpected event happens.

What Is PMI?

PMI stands for private mortgage insurance. Some lenders require that borrowers purchase PMI because this protects the lenders in the event of a default. PMI is commonly required for mortgages that involve down payments of less than 20 percent of the loan amount. Generally, monthly PMI payments will be rolled into the mortgage payment, but sometimes, borrowers pay a one-time premium at the closing.

How Is PMI Calculated on a Conventional Home Loan?

To calculate PMI on a conventional home loan, first, calculate the loan pricipal by subtracting the down payment from the price of the home. Then, determine the mortgage insurance coverage, which is the amount the insurance company would pay the lender upon default. This amount is based on the loan balance multiplied by the coverage amount, which may range between 16 and 35 percent. Finally, determine the PMI percentage that intersects with these figures and your credit score on the lender's PMI table to arrive at a monthly premium percentage. Multiply this percentage by the loan amount, then divide by 12 to arrive at a monthly cost.

How Do You Determine a Down Payment on a House?

The down payment is the amount of money you will pay up front toward a home. Many lenders require a down payment, possibly a minimum of 20 percent of the total home price. Your credit score is often a factor in the amount of down payment required by lenders: Those with higher credit scores might not need to pay a high down payment. The more you pay down on a mortgage, the less money you will have to borrow and the lower your interest rate will likely be. While it may be possible to finance 100 percent of a home purchase, this may not be a financially sound approach. The lender you use will present your loan options and terms so you know how much of a down payment will be required for a mortgage.

How Many Years Will it Take to Pay Off My Mortgage?

The term of the mortgage is the number of years you will make payments until you fully pay off the mortgage, and this will be detailed in your loan agreement. Following the terms as they are in the mortgage will satisfy the loan at the end of this period. However, some homeowners prefer to pay off a mortgage faster to save money on interest. A home mortgage calculator can enable you to enter the principal balance, the annual interest rate, the current monthly payment, and the number of years desired to fully pay off the loan. The calculator will return results that indicate the monthly payment required to pay off the loan within the desired number of years.

How Do I Calculate Paying Off My Mortgage?

An advanced mortgage calculator like ours can make it easy to calculate all the details of paying off a mortgage. By adjusting the number of payments up or down, the estimated mortgage calculator will show you precisely what you can anticipate for monthly payments. You can also see how your total mortgage amount will vary depending on the interest rate for the loan.

At ImproveNet, we're here to help homeowners, including those who are just starting out buying their first home. That's why we've created the best mortgage calculator to help prepare you for this new financial obligation, and that's also why we're focused on providing resources to better inform homeowners looking to improve their homes. Sign up for our newsletter today and we'll send you tips to help you make your new house into your dream home.

Last updated on May 23, 2019

Looking for accurate quotes on your project?

  • Get multiple quotes for any home improvement project
  • See pro's rating, reviews, projects and more
  • 100% free, no obligations
  • Only takes a few minutes

Find pros in your area.