Homebuyers: How to Make the Most of Your Mortgage Payment Calculator

When it comes to purchasing a home, the math can get a little complicated. After all, we’re talking price tags in the hundreds of thousands of dollars range, ever-changing interest rates, credit scores, pay stubs, and so much more.

While you could technically work everything out on a sheet of paper yourself, you could also do yourself a favor and turn to tech. Maybe save some time, energy, and red pen?

Whether you’re a mathematician or completely number-averse, a good mortgage payment calculator will be a valuable tool in your home search process. And the best part? We think you’ll find they’re much easier to use than those old TI-89s from high school.

What is a Mortgage Payment Calculator?

Think of it like AI for your home finances. You’ll type in a few key details, press “enter”, the tech will crunch the numbers, and out comes your hypothetical principal and interest mortgage payment based on the information you enter. Yes, it really is that easy!

What You Need to Know When Using a Mortgage Payment Calculator

While the mechanics of the calculator are pretty straightforward, there are a few pro tips you’ll want to keep in mind:

They’re only as good as the information you provide

A mortgage calculator can only go off what you give it. The tech can’t check your credit score, verify your income amount, or notice and fix typos. Not yet, anyway…

That means you’ll need to gather some information to use one properly. To use most mortgage payment calculators, you should plan to have on hand:

• Your desired loan type. Conventional loans come with different interest rates and required down payment amounts than government-backed loans. The calculator will need to know those specifics to give you the most accurate answer.
• The loan term you’re leaning toward. Borrowers who take out a 15-year loan enjoy lower interest rates but see higher monthly payment amounts. So, the calculation will change from one loan term to another.
• A ballpark property price and ballpark down payment amount. These figures are key in your calculations because they play a large part in determining how much you’ll need to borrow.
• The interest rate you could reasonably expect to receive. 

Hidden costs might not be reflected

While a mortgage calculator can give you some insight into potential mortgage payment amounts, unfortunately, this isn’t the only cost of homeownership. There are also a few private-mortgage-insurance-en-122/” >hidden costs you should be aware of, including private mortgage insurance (PMI), escrow payments for taxes and insurance, closing costs, fees, and more. You’ll want to discuss these with a home finance professional before banking on the calculator’s answer.

The information isn’t official

In the same vein, keep in mind that mortgage payment calculators can’t and won’t provide any official information and do not constitute a loan approval or loan offer.  All loans are subject to qualification. Payment calculators may just be useful tools for determining potential. When it comes time to crunch the numbers for real, you’ll definitely want to speak with a (human) mortgage professional.

Some calculators are better than others

The math involved in buying a home can get pretty complicated. That’s why mortgage payment calculators can be so helpful in the first place.

The issue is, though, that these tools aren’t created equal. In fact, some just ask for the principal amount and interest rate. Does that calculation seem a little too easy? That’s because it totally discounts things like other debt and expenses, income needed to potentially qualify, and even nifty little benefits known as mortgage points. These are important pieces of the homebuying puzzle too, so you’ll benefit if you use a tool that takes them into account.

How to Choose a Mortgage Payment Calculator

Many homebuying-related sites will offer a mortgage calculator. That includes Forbes, NerdWallet, and more.

But, if you’ll allow us to toot our own horn for just a moment, we have a few tried-and-true mortgage calculator tools that might help, too:

Need to start with the basics?

There’s a calculator for that.

• Our mortgage calculator is straightforward and super easy to use. Just input the basic information outlined above and get a peek at your hypothetical mortgage payment.
• Trying to determine your annual percentage rate (APR)? This tool will help clarify all things interest rates. Change and adjust the information to see how it impacts your APR and hypothetical payment amount in real time.
• Wondering if you should pay for mortgage discount points? Our points calculator can help you find the breakeven point.

Want other good-to-know options?

There’s a calculator for that, too!

• *Our extra payment calculator figures the length of your hypothetical mortgage depending on if you pay more than your monthly payment each month. By paying more than your mortgage payment every month, you may be able to decrease the length of your loan. Hooray!
• Curious about the potential tax benefits of buying? This tool can help you understand one of the biggest potential benefits of homeownership.
• What is the interest-only payment? This calculator will show an interest-only payment amount based on your loan parameters.

Trying to determine what you can afford?

Trust us – you don’t want to just go off a guess. 

• Our affordability calculator can help clarify how much house you may be able to actually afford.
• If you’re wondering how much income you need to qualify, we’ve got a calculator for that, too.

Already have a mortgage?

Mortgage calculators aren’t just for first-time buyers.

• Looking to refinance? Use this calculator to determine your hypothetical monthly payment breakdown.
• Want to determine how much your principal might be after X months? This calculator figures the principal balance remaining after a certain length of repayment. This is especially useful in determining your principal balance after the introductory period of your Adjustable Rate (“ARM”) loan.

Disclaimer: Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual circumstances. All examples are hypothetical and are for illustrative purposes and do not constitute loan approvals.  All loans are subject to qualification. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Making the Most of Your Mortgage Payment Calculator

It’s no secret that the math involved in home financing is pretty complicated. And trust us, your lender and mortgage loan originator (“MLO”) have plenty of tools on hand specifically to avoid crunching all those numbers with pen and paper. So why shouldn’t you?

A good mortgage payment calculator may be an important addition to any buyer’s toolbox. It can help simplify the process, grow your understanding, and make homeownership that much more attainable. All you need is some basic information, a few keystrokes, and voila! Thank you, technology.