Free Mortgage Calculator: Compare Loans, Rates & Payments
Estimated Monthly Payment
$0
How to Use This Calculator
This comprehensive mortgage calculator helps you estimate monthly payments and costs for:
- Conventional mortgages
- FHA loans
- VA loans
- Jumbo loans
- Refinancing options
Adjust the sliders to see how different factors affect your monthly payment:
- Home Price: Enter the total purchase price of the home
- Down Payment: Typically 3-20% of the home price
- Loan Term: Common terms are 15 or 30 years
- Interest Rate: Current market rates for your loan type
- Property Tax: Annual property tax for your area
- Home Insurance: Estimated annual insurance premium
Mortgage Loan Type Comparison
| Loan Type | Down Payment | Credit Score | Benefits |
|---|---|---|---|
| Conventional | 3-20% | 620+ | Lower rates, no upfront mortgage insurance |
| FHA Loan | 3.5% | 580+ | Lower credit requirements, higher DTI allowed |
| VA Loan | 0% | 620+ | No down payment, no PMI, competitive rates |
| Jumbo Loan | 10-20% | 700+ | Higher loan limits, luxury home financing |
Understanding Mortgage Rates & Terms
Common Loan Terms
30-Year Fixed
Most popular option. Offers lower monthly payments but higher total interest over the loan life. Best for long-term homeowners.
15-Year Fixed
Higher monthly payments but significant interest savings. Build equity faster with accelerated mortgage payoff.
Adjustable Rate (ARM)
5/1, 7/1, or 10/1 ARMs offer lower initial rates. Rate adjusts after fixed period. Good for short-term homeowners.
Interest Rate Factors
- •Credit Score: Higher scores (680+) qualify for better rates
- •Down Payment: 20% down avoids PMI (Private Mortgage Insurance)
- •DTI Ratio: Debt-to-income ratio under 43% preferred
- •Property Type: Single-family homes often get better rates
Loan Types Explained
Conventional Loans
Standard mortgages not backed by government. Require better credit but offer competitive rates and flexible terms.
FHA Loans
Government-backed with lower credit requirements (580+). 3.5% minimum down payment. Include mortgage insurance premium.
VA Loans
For veterans and service members. No down payment required. No PMI, competitive rates, and VA funding fee may apply.
Jumbo Loans
For high-value homes exceeding conforming loan limits. Require excellent credit, larger down payments, and higher income.
Additional Cost Considerations
Mortgage Insurance
- Required with < 20% down
- Typically 0.5-1% annually
- Can be removed at 20% equity
Closing Costs
- 2-5% of loan amount
- Includes origination fees
- Appraisal and title fees
Points & Buydowns
- Pay points to lower rate
- 1 point = 1% of loan
- 2-1 buydown option
Pro Tips
- →Compare APR (Annual Percentage Rate) not just interest rates - it includes fees for true cost comparison
- →Consider biweekly payments to reduce total interest and pay off mortgage faster
- →Check if you qualify for first-time homebuyer programs for better rates and down payment assistance
Home Buying Process Timeline
Pre-Approval (1-3 days)
Get pre-approved to understand your budget and strengthen offers
House Hunting (1-3 months)
Search for homes within your pre-approved budget
Offer & Negotiation (1-2 weeks)
Make an offer and negotiate terms with the seller
Closing Process (30-45 days)
Complete inspections, appraisal, and final loan approval
Common Mortgage Questions
What is DTI (Debt-to-Income Ratio)?
DTI compares your monthly debt payments to your gross monthly income. Most lenders prefer a DTI of 43% or less for conventional loans.
How does PMI work?
Private Mortgage Insurance (PMI) protects lenders if you default. It's typically required for conventional loans with less than 20% down and costs 0.5-1% of the loan amount annually.
What's included in closing costs?
Closing costs typically range from 2-5% of the loan amount and include lender fees, appraisal, title insurance, escrow fees, and prepaid items like property taxes and insurance.
What's the difference between pre-qualification and pre-approval?
Pre-qualification is a quick estimate based on self-reported information, while pre-approval involves document verification and a credit check for a more accurate lending amount.
Additional Resources
First-Time Homebuyer Tips
- Check your credit score and improve it if needed
- Save for a down payment and closing costs
- Get pre-approved before house hunting
- Compare multiple lender offers
Common Closing Costs
- Loan origination fees
- Appraisal and inspection fees
- Title insurance and search fees
- Property taxes and insurance prepayments
Mortgage Terms Glossary
Understanding mortgage terminology is crucial for making informed decisions. Here's a comprehensive glossary of common mortgage terms:
Loan Terms & Types
- Conventional Loan
- A mortgage not backed by government agencies like FHA, VA, or USDA.
- Jumbo Loan
- Mortgage exceeding conforming loan limits, typically used for luxury homes.
- FHA Loan
- Government-backed mortgage with lower down payment and credit requirements.
- VA Loan
- Department of Veterans Affairs mortgage for service members and veterans.
- USDA Loan
- Zero-down-payment mortgage for eligible rural properties.
- ARM (Adjustable Rate Mortgage)
- Mortgage with an interest rate that changes periodically (e.g., 5/1, 7/1, 10/1 ARMs).
Costs & Payments
- APR (Annual Percentage Rate)
- Total yearly cost of the mortgage including interest and fees.
- PMI (Private Mortgage Insurance)
- Required insurance when down payment is less than 20% on conventional loans.
- MIP (Mortgage Insurance Premium)
- FHA loan equivalent of PMI, required for the life of the loan.
- Points (Discount Points)
- Upfront fees paid to lower interest rate; 1 point equals 1% of loan amount.
- PITI
- Principal, Interest, Taxes, and Insurance - total monthly mortgage payment.
Financial Terms
- DTI (Debt-to-Income Ratio)
- Monthly debt payments divided by gross monthly income, expressed as percentage.
- LTV (Loan-to-Value Ratio)
- Loan amount divided by appraised property value, expressed as percentage.
- Escrow Account
- Account holding funds for property taxes and insurance payments.
- Amortization
- Loan payment schedule showing principal and interest breakdown over time.
- Principal
- Original loan amount borrowed, excluding interest and fees.
Property & Process Terms
- Closing Costs
- Fees and expenses paid when finalizing a mortgage, typically 2-5% of loan amount.
- Pre-Approval
- Lender's preliminary commitment to loan amount based on verified finances.
- Pre-Qualification
- Initial estimate of loan amount based on self-reported information.
- Title Insurance
- Protection against property ownership disputes or liens.
- Appraisal
- Professional assessment of property's market value.
Additional Terms
- Refinance
- Replacing existing mortgage with new loan, often for better terms.
- Cash-Out Refinance
- Refinancing for more than owed to receive difference in cash.
- HELOC
- Home Equity Line of Credit - revolving credit line secured by home.
- Balloon Payment
- Large final payment due at mortgage end.
- Rate Lock
- Guaranteed interest rate for specific period during loan processing.
- Origination Fee
- Charge for processing new loan application.
Understanding Amortization
Amortization is the process of paying off your mortgage through regular payments of principal and interest over time. Understanding how it works can help you make better financial decisions.
How Amortization Works
Early Years
Most of your monthly payment goes toward interest, with a smaller portion paying down the principal.
Middle Years
The split between interest and principal becomes more balanced as you build equity.
Later Years
Most of your payment goes toward principal, with less going to interest.
Payment Breakdown
Monthly Payment Components:
- Principal: Reduces your loan balance
- Interest: Cost of borrowing money
- Escrow: Property taxes and insurance (if applicable)
Principal vs Interest Over Time
This chart shows how your monthly payments shift from being mostly interest to mostly principal over the life of your loan. Early payments go primarily toward interest, while later payments are predominantly principal. The total height of each bar represents your annual payment amount, which remains constant over the loan term.
Ways to Save on Interest
Extra Payments
- Make additional principal payments
- Reduces total interest paid
- Shortens loan term
Biweekly Payments
- 26 half-payments per year
- Equal to 13 monthly payments
- Pay off loan faster
Shorter Term
- Higher monthly payments
- Much less total interest
- Build equity faster
Example: $300,000 Loan at 6.5% for 30 Years
First Payment
- Principal: $395
- Interest: $1,625
- Total: $2,020
Year 15 Payment
- Principal: $785
- Interest: $1,235
- Total: $2,020
Final Year Payment
- Principal: $1,985
- Interest: $35
- Total: $2,020
Key Takeaways:
- Your monthly payment amount stays the same, but the principal/interest split changes over time
- Extra principal payments early in the loan have the biggest impact on total interest paid
- Use our amortization schedule calculator to see your loan's complete payment breakdown
- Consider refinancing if you can get a significantly lower interest rate