Using Our Mortgage Payment Calculator
It’s important to ensure the home you’re buying aligns with your budget and financial goals. Using our mortgage payment calculator is easy and helps you determine how much of a home you can financially manage. Play around with different interest rates, loan terms and down payment scenarios to find the best combination for your budget and future goals.
Basic Mortgage Calculator
Use the basic mortgage calculator to figure out your total monthly mortgage payment without considering the annual property taxes or homeowners insurance premiums.
Enter the following information:
- Purchase price. The price you’re willing to pay for your new home.
- Down payment. The cash you plan to deposit toward the purchase of the home. The larger your down payment, the less loan you’ll require.
- Term. The period of your home loan, generally measured in years. Mortgage loan terms are typically 15 to 30 years, but Pennymac is proud to offer flex terms. We offer terms of 16 years, 17 years, 18 years and more on most loans.
- Interest rate. The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of money.
Advanced Results
For more accurate results, input all the information in the basic calculator, then switch to the “Advanced” tab and add the following:
- Annual property taxes. A tax assessed on real estate by the local government, usually based on the value of the property (including the land) you own.
- Annual homeowners insurance premiums. Usually required by lenders, homeowners insurance protects the homeowner from weather-related damage, as well as potential liability from events that occur on the property.
Understanding Your Mortgage Calculator Results
Your total payment is displayed at the top. For more detailed results, look at the “Breakdown,” “Over time” and “Amortization” sections.
Breakdown
This section breaks down your monthly payment by the following:
- Principal and interest. This amount, indicated in blue, includes the principal, which is the amount of money you’ll borrow. For example, if your home costs $500,000 and you borrow $350,000, your mortgage will be $350,000. This section also includes the amount of monthly interest you’ll be paying based on the rate and term of your home loan.
- Private mortgage insurance (PMI). If you input a down payment of less than 20%, you’ll see private mortgage insurance included, depicted in yellow. PMI is a policy that protects your lender and is generally required for conventional loans if you don’t put a minimum of 20% down.
- Property taxes and homeowners insurance. Your payment breakdown will also include your property taxes and homeowners insurance premiums if you choose to input those figures.
Typically, property taxes and homeowners insurance are factored into the monthly payment through an escrow account, so adding those figures will give you the best estimate of what you may be expected to pay. Keep in mind that property taxes and homeowners insurance premiums can change and often increase every year. Also take into account any HOA or condo dues. These types of dues can easily add a couple hundred dollars or more to your mortgage payment, and they must be factored into your debt-to-income ratio (DTI).
Over Time
Over time is a view of how much of your monthly payment will go toward principal vs. interest throughout the years. More of your payment will be applied to your principal as you get closer to the end of your mortgage term.
Amortization
The amortization section shows your amortization schedule, a table listing all your scheduled payments throughout your loan term. Get a month-by-month look at your payment, remaining balance, principal and interest paid, and cumulative interest paid.
What Is a Mortgage?
A mortgage is a loan secured against real property, where the property—or home—is collateral. It’s a legal agreement between a lender and the borrower. A mortgage allows a homeowner to pay back the lender in installments over an agreed-upon time period (the term) and interest rate.
How Do I Get a Mortgage?
Getting a mortgage requires applying to a lender. But first, it’s a good idea to determine your budget and the amount you’ll be qualified to borrow. Check out the Pennymac Mortgage Blog for info to help save you money, time and peace of mind during the mortgage process.
How Much Is a Down Payment?
Your down payment amount depends on a few factors. A home down payment of 20% of the purchase price is typically recommended, since this will help you avoid paying private mortgage insurance. But first-time homebuyers may be able to put down less, while certain loan types, such as FHA loans, may have different down payment requirements.
What’s Included in My Mortgage Payment?
A mortgage payment typically includes your loan principal, interest, property taxes and homeowners insurance premium.
Get Your Instant Mortgage Rate Quote
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FAQs
For example, if your interest rate is 6 percent, you would divide 0.06 by 12 to get a monthly rate of 0.005. You would then multiply this number by the amount of your loan to calculate your loan payment. If your loan amount is $100,000, you would multiply $100,000 by 0.005 for a monthly payment of $500.
What happens if I make 2 extra mortgage payments a year on a 30-year mortgage? ›
Faster Loan Payoff
By making two additional principal payments each year, you'll pay off your loan significantly faster: Without extra payments: 30 years. With two extra payments per year: About 24 years and 7 months.
How much would a $300,000 mortgage cost? ›
The monthly payment on a $300,000 mortgage depends on what interest rate you get and the term you choose. On a 30-year loan at a 7% rate, it would be $1,996 per month toward your principal and interest. Keep in mind that you also have to pay for expenses such as homeowners insurance and property taxes each month.
What happens if I pay an extra $2000 a month on my mortgage? ›
The additional amount will reduce the principal on your mortgage, as well as the total amount of interest you will pay, and the number of payments.
What is the formula for calculating monthly payments? ›
Monthly Payment = (P × r) ∕ n
Again, “P” represents your principal amount, and “r” is your APR. However, “n” in this equation is the number of payments you'll make over a year. Now for an example. Let's say you get an interest-only personal loan for $10,000 with an APR of 3.5% and a 60-month repayment term.
Which formula should be used to correctly calculate the monthly mortgage payment? ›
The correct formula to calculate the monthly mortgage payment is: m = p * (r * (1 + r)^n) / ((1 + r)^n - 1). This formula considers the principal amount, monthly interest rate, and the total number of payments to determine the fixed monthly payment required to repay the mortgage loan over the specified period.
How to pay off a 30-year mortgage in 15 years? ›
It suggests that homeowners who can afford substantial extra payments can pay off a 30-year mortgage in 15 years by making a weekly extra payment, equal to 10% of their monthly mortgage payment, toward the principal.
When should you not pay extra on a mortgage? ›
You have high-interest debt.
Rather than make extra payments toward your mortgage principal, consider paying down high-interest debt first. This can include credit card, student loan, medical, and car loan debt, just to name a few.
What is the 2 rule for mortgage payments? ›
The 2% rule states that you should aim for a 2% lower interest rate in order to ensure that the savings generated by your new loan will offset the cost refinancing, provided you've lived in your home for two years and plan to stay for at least two more.
What credit score is needed to buy a $300K house? ›
What credit score is needed to buy a $300K house? The required credit score to buy a $300K house typically ranges from 580 to 720 or higher, depending on the type of loan. For an FHA loan, the minimum credit score is usually around 580.
To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific annual salary will vary depending on your credit score, debt-to-income ratio, type of home loan, loan term, and mortgage rate. Homeownership costs like HOA fees can also impact affordability.
What is 7% interest on $300,000? ›
Your total interest on a $300,000 mortgage
On a 30-year mortgage with a 7.00% fixed interest rate, you'll pay $418,527 in interest over the loan's lifetime.
What happens if I pay 4 extra mortgage payments a year? ›
Making additional principal payments will shorten the length of your mortgage term and allow you to build equity faster. Because your balance is being paid down faster, you'll have fewer total payments to make, in-turn leading to more savings.
Do large principal payments reduce monthly payments? ›
Do Large Principal-Only Payments Reduce Monthly Payments? No matter how many principal-only payments you make on a fixed-rate mortgage, your monthly payment stays the same unless you recast your mortgage. You'll end up making fewer total payments and paying off your mortgage faster.
At what age should you pay off your mortgage? ›
To O'Leary, debt is the enemy of any financial plan — even the so-called “good debt” of a mortgage. According to him, your best chance for long-term financial success lies in getting out from under your mortgage by age 45.
Mortgage CalculatorCalculator.nethttps://www.calculator.net ›
Monthly, Total. Mortgage Payment, $2,004.55, $721,639.14. Property Tax, $400.00, $144,000.00. Home Insurance, $125.00, $45,000.00. Other Costs, $333.33, $120,00...
Mortgage rates drop or rise daily, reacting to changing economic conditions, central bank policy decisions, and investor sentiment. The table shows current mort...
A mortgage payment calculator takes into account factors including home price, down payment, loan term and loan interest rate in order to determine how much you...
With a $70,000 annual salary and using a 50% DTI, your home buying budget could potentially afford a house priced between $180,000 to $280,000, depending on your financial situation, credit score, and current market conditions. This range is higher than what you might qualify for with more traditional DTI limits.
What is the formula for calculating monthly mortgage payments in Excel? ›
What Is the Formula for Monthly Payments in Excel? Use the PMT function in Excel to create the formula: PMT(rate, nper, pv, [fv], [type]). 1 This formula lets you calculate monthly payments when you divide the annual interest rate by 12, for the number of months in a year.
How to calculate interest rate on a loan based on monthly payment? ›
Divide your interest rate by the number of payments you'll make that year. If you have a 6 percent interest rate and you make monthly payments, you would divide 0.06 by 12 to get 0.005. Multiply that number by your remaining loan balance to find out how much you'll pay in interest that month.
How much house can I afford with an 80k salary? ›
With an $80,000 annual salary, you could potentially afford a house priced between $240,000 to $320,000, depending on your financial situation, credit score, and current market conditions. However, this is a broad range, and your specific circ*mstances will determine where you fall within it.
