Mortgage calculator – CNET

Buying a home is complicated and calculating how much you can afford each month can be tricky.

The calculator below can help you quickly estimate how much you could pay for mortgage costs. Simply enter the home price, down payment, loan term, interest rate, and other key details here.

How to calculate mortgage payments

This calculator excludes expenses like private mortgage insurancea advance payment, closing costs and attorney’s fees. We do, however, offer some guidelines for estimating these below. It should also be recognized that this calculator can only provide an estimate: your payment will depend on your specific situation, including your property, state of residence and the specific terms of the lender.

Want to estimate how much you’ll pay each month for your mortgage? This calculator uses the standard mortgage equation to determine your estimated monthly payment.

M=P [ r (1 + r)^n ] / [ (1 + r)^n – 1]

  • M = your monthly mortgage payment
  • P = amount of your principal loan
  • r = your monthly payment interest rate. Most lenders list this as an annual figure, so you’ll need to divide this number by 12 to calculate your monthly rate. For example, if your rate is 4%, your monthly rate would be 0.003333 (0.04/12=0.003333).
  • n = the number of monthly payments you will make for the duration of the mortgage. To find it, multiply the number of years in your loan term by 12 (the number of months in a year) and you’ll get your total number of payments. A standard 30-year fixed mortgage, for example, would have 360 ​​payments (30 x 12 = 360).

Fees included in your mortgage payment

In addition to principal and interest, there are other upfront and monthly costs to consider as part of the home buying process:

  • Advance payment: Depending on your type of home loan, a typical down payment is usually 20% – although some types of loans allow you to deposit less – and in some cases even nothing.
  • Closing costs: When you close your new home, your closing costs can vary from 3% to 6% of the total amount of the mortgage. These fees include:
    • Assembly costs. These fees are charged by the lender for “originating” or creating your loan. Other costs in this category include filing fees, underwriting fees, processing fees and administrative fees.
    • Points. If you decide to pay points, you’ll pay more up front in exchange for a lower monthly payment. One point equals 1% of the loan amount.
    • Government taxes and fees. These are charged by your local government.
    • Prepaid expenses and deposits. You will usually need to do a initial deposit in escrow for your property taxes and home insurance.
  • Mortgage insurance: Depending on your type of loan and the amount of your down payment, you may need take out home loan insurancewhich usually includes an upfront payment.
  • Property taxes and home insurance. In addition to an initial deposit, you’ll also need to make monthly payments for property taxes and home insurance, usually built into your mortgage amount.

Next steps in the home buying process

Once you know how much house you can affordyou can start the mortgage pre-approval process and start your home search. Your lender will use more detailed information than our calculator, so your actual affordability may look a little different. And don’t forget to shop around to ensure you get the best rates available.

buyer’s glossary

When you are new to buying a home, some terms may be unfamiliar to you. We’ve compiled some of the standard terms associated with buying a home to help you understand the process.

  • APR: Your annual percentage rate is the combination of your interest rate and the lender’s fees.
  • Credit score: Your the credit score assesses your creditworthiness telling lenders how likely you are to repay your loan. In general, the higher your credit score, the lower your interest rate.
  • DTI report: Your debt to income ratio is the amount of your monthly repayments divided by your monthly income. It shows lenders what percentage of your income is in debt each month. The highest DTI you can have for a mortgage is 43%, although most lenders prefer a DTI of 36% or less.
  • Advance payment: Your advance payment is the amount of money you pay upfront for your home, shown as a percentage of the purchase price. Most lenders require at least 3-5% down payment, although a down payment of at least 20% does not result in any private mortgage insurance.
  • home insurance: Home insurance is a type of insurance that compensates you for your losses in the event of damage to or destruction of your home. Most mortgage lenders require borrowers to have home insurance.
  • Revenue: For purposes of qualifying for a mortgage, lenders generally use your gross income, which is your salary before any taxes or other deductions.
  • mortgage term: The term of your mortgage corresponds to the number of years of your mortgage. Most mortgages have a 30 year term, but you can also get a 15 or 20 year term.
  • PITI: PITI stands for Principal, Interest, Taxes and Insurance, the four components of your monthly housing expenses.
  • Property taxes: Property taxes are paid to your local government. The amount you will pay depends on the value of your home and the property tax rate in your area.

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