Use our home loan calculator to get a clear and accurate estimate of the true cost of your mortgage loan. With our helpful tool, you can see a detailed breakdown of all associated costs. The home loan calculator is most valuable in correctly calculating the APR (annual percentage of expenses). This figure must be included by law and we want you to have it handy to compare offers from different banks.
Important: The housing loan calculator is designed for convenience – when you make changes, the values are calculated automatically and quickly in real time. This makes calculations easy and fast without having to click a separate button to perform the calculations. The home loan calculator makes it easy to compare the terms of different bank home loans to find the best one for your needs. You can compare loans based on terms, desired amount and collateral. With the help of a home loan calculator, you will get a general idea of the annual percentage of the costs, the current interest rates from the different banks and the fees/insurance payable. Additionally, additional requirements are required. With this method, you can compare the interest rates of different banks when buying a new property or refinancing your home.
If you complete the short form, one of our licensed credit counselors will contact you shortly with a personalized offer. We will ensure that you get the best mortgage loan offer that suits your needs.
Visit our consumer loan calculator for more information and great consumer loan offers!
The benefits of using a home loan calculator
Your housing budget will depend heavily on your monthly home payments, so it’s important to calculate it before you start shopping for a home equity loan or refinance. Bankrate has a home loan calculator where you can easily estimate your mortgage payment, such as
enter different data. This calculator can help you determine different scenarios and how they would affect your monthly payment, such as:
● Finding the right loan term for you. There are two main types of mortgages: fixed rate and adjustable rate. A 30-year fixed-rate mortgage is a good solution if your budget is tight. These loans come with lower monthly payments, although you will pay more interest over the life of the loan. If you have a little room in your budget, a 15-year fixed-rate mortgage lowers the total interest you’ll pay, but requires higher monthly payments.
● An adjustable-rate mortgage (ARM) may be a good option. As interest rates rise, you may be tempted to choose an adjustable rate mortgage (ARM). Typically, initial rates on ARMs are lower than their conventional equivalents. If you only plan to stay in your home for a few years, then a 5/6 ARM may be the best choice—this type of ARM has a fixed rate for five years before adjusting every six months. Just be aware of how much your monthly mortgage payments can increase after the prime rate expires.
● Suppose you give more money than you have. Using a home loan calculator gives you a monthly breakdown of how much you’ll pay in taxes and insurance.
● What amount of down payment to make? Although 20 percent is considered a common down payment, it is not required. Many borrowers make a down payment of 3 percent or less.
How to determine how expensive a house you can afford
A general guideline for how much of your income you should spend on housing is the 28/36 percent rule. Most financial advisors recommend housing costs make up no more than 28 percent of your gross income, in the form of rent or mortgage payments. They also recommend that 36 percent be the maximum you should spend on total debt, including mortgage payments, credit cards, student loans, medical bills and similar expenses. Here is an illustration:
Joe’s gross monthly income is $5,000, which equates to $60,000 per year. If we multiply $5,000 by 0.28, Joe’s monthly mortgage payment will be $1,400 (PITI).
Joe’s maximum monthly mortgage payments, including interest, taxes, and insurance, should be $1,400. This would allow a loan amount of up to $253,379. Although you can qualify for a mortgage with a debt-to-income (DTI) ratio of up to 50 percent for some loans, using such a large percentage of your income for debt each month can leave you with no room in the budget for other expenses such as retirement savings or discretionary spending. Lenders won’t take these extra budget items into account when they pre-approve you for a loan, so you have to do this yourself. This will give you a better idea of what kind of housing payments you can make each month. The last thing anyone wants is to be stuck in a delinquent home loan for 30 years – even if the lender is willing to provide the money.
How to lower your monthly mortgage payment
If the monthly payment in our home loan calculator is too high for you, don’t worry! You can try reducing some of these variables:
● A longer loan has a lower monthly payment, but you’ll pay more interest in the long run.
● You can lower your monthly mortgage payment by spending less for your home.
● You can skip private mortgage insurance (PMI) by making a down payment of 20 percent or more.
● You can research and shop around for a lower interest rate, which may have an upfront cost called points.
● By making a larger down payment, you will be able to reduce your loan amount.
Frequently Asked Questions:
How much can you borrow for a home loan?
The amount that the bank is willing to finance you for a home loan varies from 50-85% of the appraised value of the property, depending on factors such as type, size, location and condition.
How can you apply for a mortgage?
You can start the mortgage application process by first reviewing your credit profile and improving your credit score. A high credit score will qualify you for a lower mortgage interest rate. Then calculate how much expensive housing you can afford, also factoring in the amount of down payment you can afford.
How can I reduce the interest on my loan?
Review the other products your bank offers to loyal customers who use services such as payroll transfers, household bill payments, insurance and online and mobile banking. They often come with reduced interest rates on loans.
What is the difference between a loan where you pay the same amount every month, and a loan where your monthly payment goes down?
Your loan payment consists of interest and principal. Let’s say you make equal monthly payments throughout your loan. In this case, the amount will contain more interest in the initial phases, which then gradually changes to consist mostly of principal towards the end. Paying off a loan with decreasing monthly payments results in higher early payments that decrease over time. The principal is initially equal, but the interest decreases over time.
How does the bank calculate monthly payments?
The bank takes into account information about your total income and expenses to decide the most suitable amount for your monthly payment. We calculate your monthly payments based on what we determine you can afford, so you can handle the hassle of making a payment.
What is loan collateral?
Loan collateral guarantees that the loan will be repaid in full if the borrower is unable to make payments. Collateral can take various forms: a salary, a lien on the property or a mortgage. If the debtor defaults on his payments, another possible security is for a guarantor to take responsibility for the repayment.
What is the difference between a mortgage and a home loan?
The housing loan is granted specifically for the purchase of real estate, and the granted funds are transferred directly from the seller’s bank. On the other hand, a mortgage loan is any loan secured by a mortgage. You can apply for a mortgage loan to buy a home and cover costs such as repairs, furniture or other purchases.
A housing loan is a loan specifically for the purchase of real estate. The funds are transferred from the bank to the seller. A mortgage loan is any loan secured by a mortgage. You can use a mortgage loan to buy a house and other needs such as repairs, furniture or other purchases.
How to choose the best credit terms?
Which bank should you choose for your next loan? We’ve created a consumer and home loan calculator to make things easier. With its help, you can compare different banking conditions and choose the best one according to your needs.
What distinguishes the choice with salary transfer from the one without?
When making a salary transfer through the bank, you will be rewarded with lower interest rates on each loan. The only condition is that your monthly salary goes into the same bank.