Mortgage Calculator
Estimate your monthly mortgage payment, property taxes, homeowners insurance, homeowners association (HOA) fees, and primary mortgage insurance (PMI). Select the loan type and enter your home price and down payment to see how your monthly payment changes. You can also adjust the home price by changing the home slider. All fees adjust with home price and downpayment with the exception of HOA fees which should be entered in manually.
Mortgage Term Definitions
Home price
The total price you expect to pay for your home or the current home value if you are refinancing. In addition to entering the value in the home price box, you can also change the home price by adjusting the home slider. Remember to keep your home price affordable. It is recommended that you have at least a 5% down payment. Also, ensure that the home is no more than 3 (normal cost of living area) to 5 (high cost of living area) times your salary.
Down payment
The amount of money you put "down" on your house. Represented as a percentage of the home price, it is the difference between the home price and your total loan amount. It is recommended putting down a minimum of 5% but preferably more than 10%. The higher the down payment - the lower your upfront fees, primary mortgage insurance (PMI), and interest rate are. In fact, down payments over 20% remove PMI entirely! To see how down payment can affect your mortgage rate and lender fees, check out our Credit Score Impact Calculator & read our featured article How Credit Score & Down Payment Affect Your Mortgage Rate..
Interest Rate
The cost of borrowing your loan. If the interest rate is 3% and your loan is for $100,000, you will pay $3,000 of interest in the first year of your mortgage. For fixed rate mortgages, while the interest rate stays the same, the total dollars paid in interest goes down over time. Remember, interest rates vary dramatically between lenders. Compare and shop for the best interest rates by utilizing MortgageHog's Rate Comparison Tool.
Monthly Payment
The total ongoing cost of your mortgage loan, applicable taxes, and insurance. Typically, a monthly mortgage payment will include Principal & interest, Property taxes, Property insurance, Primary mortgage insurance (PMI), and Homeowners association (HOA) fees. Besides Principal & Interest (stays static) and PMI (eventually goes away), all other fees will increase slowly over time with inflation.
Loan Product
The type of loan utilized. There are two properties that define a loan product: loan term and whether the interest rate is fixed. Loan term, is how long a borrower is required to pay on the mortgage. The most common loan term is 30 years, but borrowers can also get 15 year or even 10/20 year terms. The shorter the loan term, the higher the payment. The second property of a loan product is whether the interest rate is fixed. If a loan product is adjustable, the interest rate can change making the payment go up or down.
Principal & Interest
Principal & Interest represent the pure cost for repaying a mortgage loan. Because all mortgage loans amortize (pay down over time), there is always a principal component of your monthly payment. While usually the largest piece of your overall mortgage payment, Principal & Interest can vary between 50% and 85% of your total mortgage payment depending on your local taxes & insurance, down payment, and credit score.
Property Tax
State & Local taxes due on the home. While usually paid 1-2 times per year, property taxes are usually collected in an escrow and paid on your behalf. There are two properties that define a loan product: loan term and whether the interest rate is fixed. Loan term, is how long a borrower is required to pay on the mortgage. The most common loan term is 30 years, but borrowers can also get 15 year or even 10/20 year terms. The shorter the loan term, the higher the payment. The second property of a loan product is whether the interest rate is fixed. If a loan product is adjustable, the interest rate can change making the payment go up or down. Property tax can range widely between different states and cities. Property tax usually falls between 0.5% - 3% of the home value. MortageHog utilizes state tax percentage averages when estimating property taxes.
Property Insurance
Insurance to fix or rebuild any damage to the home caused by hazards such as fire or weather. Insurance costs are escrowed and paid by the lender. Like property taxes, property insurance rates vary by geography. As a percentage of home value, property tax rates range from 0.25% - 2.25%. MortgageHog by default uses property tax state averages for estimating property tax.
Primary mortgage insurance (PMI)
Primary mortgage insurance or (PMI) is insurance paid by the borrower that covers the lender from losses on the mortgage loan (in case the borrower defaults). PMI can range from 0.125% to 2% of the loan value. The biggest factor that drives PMI higher are low credit scores and low down payment.
Homeowners Association (HOA) Fees
Homeowners Association (HOA) fees are fees paid to a neighborhood association for providing common services such as landscaping, snow removal, tv, internet, security, or shared utilities like water. HOA fees will increase depending on the level of services you receive for being a part of an association. Fees can range from a nominal amount of $10/month to over 2% of the home value.
