Written by Rene Bermudez | Edited by Crissinda Ponder | Updated March 22, 2024Our calculator helps you find how much your monthly home loan payment could be. You only need eight pieces of information to get started with our simple mortgage calculator:
If you’re an old-school math whiz and prefer to do the math yourself using a mortgage payment formula, here’s the equation embedded in the mortgage calculator that you can use to calculate your home loan payments:
A = Payment amount per period
P = Initial principal balance (loan amount)
r = Interest rate per period
n = Total number of payments or periods
Loan Product | Interest Rate | APR |
|---|---|---|
| 30-year fixed rate | 7.11% | 7.40% |
| 20-year fixed rate | 6.22% | 6.39% |
| 15-year fixed rate | 6.64% | 6.94% |
| 10-year fixed rate | 6.94% | 7.60% |
| FHA 30-year fixed rate | 6.30% | 7.01% |
| 30-year 5/1 ARM | 6.43% | 7.84% |
| VA 30-year 5/1 ARM | 5.77% | 6.67% |
| VA 30-year fixed rate | 5.86% | 6.09% |
| VA 15-year fixed rate | 5.55% | 6.02% |
A mortgage is an agreement between you and the company that gives you a loan for your home purchase. It also allows the lender to take the house if you don’t repay the money you’ve borrowed.
Amortization is the mathematical process that divides the money you owe into equal payments, accounting for your loan term and your interest rate. When a lender amortizes a loan, they create a schedule that tells you when each payment will be due and how much of each payment will go to principal versus interest.
The mortgage calculator estimates a payment that includes principal, interest, taxes and insurance payment — also known as a PITI payment. These four key components help you estimate the total cost of homeownership.
The monthly mortgage payment on a $300,000 house would likely be around $1,980 at current market rates. That estimate assumes a 6.9% interest rate and at least a 20% down payment, but your monthly payment will vary depending on your exact interest rate and down payment amount.
Why your fixed-rate mortgage payment might go upEven if you have a fixed-rate mortgage, there are some scenarios that could result in a higher payment:
There are a lot of important money choices to make when you buy a home. A mortgage calculator can help you decide if you should:
Think a shorter term will work for you? See 15-year mortgage ratesLenders use your debt-to-income (DTI) ratio to decide how much they are willing to lend you. DTI is calculated by dividing your total monthly debt — including your new mortgage payment — by your pretax income.
Most lenders are required to max DTI ratios at 43%, not including government-backed loan programs. But if you know you can afford it and want a higher debt load, some loan programs — known as nonqualifying or “non-QM” loans — allow higher DTI ratios.
Example: How DTI ratio is calculatedYour total monthly debt is $650 and your pretax income is $5,000 per month. You’re considering a mortgage with a $1,500 monthly payment.
→ Your DTI ratio is 43% because ($1500 + $650) ÷ $5,000 = 43%.
To decide if you can afford a house payment, you should analyze your budget. Before committing to a mortgage loan, sit down with a year’s worth of bank statements and get a feel for how much you spend each month. This way, you can decide how large a mortgage payment has to be before it gets too hard to manage.
There are a few rules of thumb you can go by:
Why shouldn’t I use the full mortgage loan amount my lender is willing to approve?The answer depends on several factors including your interest rate, your down payment amount and how much of your income you’re comfortable putting toward your housing costs each month. Assuming an interest rate of 6.9% and a down payment under 20%, you’d need to earn a minimum of $150,000 a year to qualify for a $400,000 mortgage. That’s because most lenders’ minimum mortgage requirements don’t usually allow you to take on a mortgage payment that would amount to more than 28% of your monthly income. The monthly payments on that loan would be about $3,250.
A $2,000 per month mortgage payment is too much for borrowers earning under $92,400 a year, according to typical financial advice. How do we know? A conservative or comfortable DTI ratio is usually considered to be anywhere from 1% to 26%, if you only include mortgage debt. A $2,000 per month mortgage payment represents a 26% DTI if you earn $92,400 per year.
Try one or all of the following tips to reduce your monthly home loan payment:
Choose the longest term possible. A 30-year fixed-rate loan will give you the lowest monthly payment compared to shorter-term loans.
Make a bigger down payment. Your principal and interest payments as well as your interest rate will typically drop with a smaller loan amount, and you’ll reduce your PMI premium. Plus, with a 20% down payment, you’ll eliminate the need for PMI altogether.
Consider an adjustable-rate mortgage (ARM). If you only plan to live in your home for a few years, ask your lender about an ARM loan. The initial rate is typically lower than fixed rates for a set time period; once the teaser rate period ends, though, the rate will adjust and is likely to increase.
Shop for the best rate possible. LendingTree data show that comparing mortgage quotes from three to five lenders can save you big on your monthly payments and interest charges over your loan term.
Back to calculator