If you're not sure how much of your income should go toward housing, follow the tried-and-true 28/36 percent rule. Many borrowers put down as little as 3 percent.

How much to put down. While 20 percent is thought of as the standard down payment, it's not required.

If you're spending more than you can afford. The Mortgage Calculator provides an overview of how much you can expect to pay each month, including taxes and insurance.

However, pay close attention to how much your monthly mortgage payment can change when the introductory rate expires. A 5/6 ARM - which carries a fixed rate for five years, then adjusts every six months - might be the right choice if you plan to stay in your home for just a few years. Initial rates for ARMs are typically lower than those for their conventional counterparts.

If an ARM is a good option. As rates rise, it might be tempting to choose an adjustable-rate mortgage (ARM).

If you have some room in your budget, a 15-year fixed-rate mortgage reduces the total interest you'll pay, but your monthly payment will be higher. These loans come with lower monthly payments, although you'll pay more interest during the course of the loan.

The loan length that's right for you. If your budget is fixed, a 30-year fixed-rate mortgage is probably the right call.

To study various scenarios, just change the details you enter into the calculator.

As you shop for a purchase loan or a refinance, Bankrate's Mortgage Calculator allows you to estimate your mortgage payment. Mortgage insurance: If your down payment is less than 20 percent of the home's purchase price, you'll probably be on the hook for mortgage insurance, which also is added to your monthly payment.Īs you set your housing budget, determining your monthly house payment is crucial - it will probably be your largest recurring expense.As with property taxes, you pay one-twelfth of your annual insurance premium each month, and your lender or servicer pays the premium when it's due. If you live in a flood zone, you'll have an additional policy, and if you're in Hurricane Alley or earthquake country, you might have a third insurance policy. Homeowners insurance: Your insurance policy can cover damage and financial losses from fire, storms, theft, a tree falling on your home and other hazards.If you have an escrow account, you pay about one-twelfth of your annual tax bill with each monthly mortgage payment. Property taxes: Local authorities assess an annual tax on your property.Interest rates are expressed as an annual percentage. Interest: This is what the lender charges you to lend you the money.Principal: This is the amount you borrowed from the lender.Your lender also might collect an extra amount every month to put into escrow, money that the lender (or servicer) then typically pays directly to the local property tax collector and to your insurance carrier. The principal is the amount you borrowed, while the interest is the sum you pay the lender for borrowing it. The major part of your mortgage payment is the principal and the interest. Typical costs included in a mortgage payment You can edit these amounts or even ignore them as you're shopping for a loan - those costs might be rolled into your escrow payment, but they don't affect your principal and interest as you explore your options. Bankrate's calculator also estimates property taxes, homeowners insurance and homeowners association fees. Your rate will vary depending on whether you’re buying or refinancing.Īs you enter these figures, a new amount for principal and interest will appear to the right. Our calculator defaults to the current average rate, but you can adjust the percentage. Next, you'll see “Length of loan.” Choose the term - usually 30 years, but maybe 20, 15 or 10 - and our calculator adjusts the repayment schedule.įinally, in the 'Interest rate' box, enter the rate you expect to pay. You can enter either a dollar amount or the percentage of the purchase price you're putting down. A down payment is the cash you pay upfront for a home, and home equity is the value of the home, minus what you owe. In the 'Down payment' section, type in the amount of your down payment (if you're buying) or the amount of equity you have (if you're refinancing). The calculus behind mortgage payments is complicated, but Bankrate's Mortgage Calculator makes this math problem quick and easy.įirst, next to the space labeled 'Home price,' enter the price (if you're buying) or the current value of your home (if you're refinancing).

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