Mortgage Calculator: How Much Monthly Payments Will Cost – Business InsiderMay 7, 2022
The free Insider mortgage calculator shows how much you’ll pay each month based on your home price, down payment, term length, and interest rate. We also provide customized tips on how to save money on your mortgage.
Are you wondering how our mortgage calculator comes up with your monthly payment? You can calculate your monthly mortgage payment (excluding property taxes and insurance) using the following equation:
The principal is the amount you borrow to buy your home. For example, if you want to buy a $400,000 home and have $50,000 for a , you’ll need to borrow $350,000. Your loan principal is $350,000.
The monthly interest rate is different than the interest rate you see on your mortgage documents. The lender provides the yearly interest rate, so divide that rate by 12 for this equation. If your interest rate is 4.25%, divide 0.0425 by 12 to find your monthly rate: 0.00354166%.
To find the number of months required to repay the loan, multiply the number of years by 12. If you have a 30-year mortgage, multiply 30 by 12 to get 360 months.
Once you calculate M (monthly mortgage payment), you can add in the monthly property tax and payment. If you don’t already have these numbers but want to get an idea of what you’ll pay total every month, see the average property taxes in your state here and the average cost of homeowners insurance by state and home value here.
You’ve entered numbers into the mortgage calculator — so what can you do with this information?
You don’t want a high mortgage payment that will cause financial distress. There are several ways to lower your monthly payment:
A mortgage calculator can help you see all of your options for buying a home and choose the terms that best fit your situation.
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