Mortgage Calculator

How it Works

This mortgage calculator provides an outlook towards your future expenses. It calculates a summary for your amortized fixed rate loan. This summary includes your monthly payment and a breakdown of your total out of pocket expenses at the end of the loan term. A pie chart summarizes these total expenses. An option of a fixed additional monthly payment over the entire loan term may be provided to see how it reduces your loan duration.

We use the values you input to calculate your principal at the beginning of each month. Each individual expense, which is a part of the mortgage, is being tracked at every step of the calculation.

A graph displays a breakdown of your monthly payments over time. Here, your mortgage expenses are separated into the principal and interest components (P & I). Contributions are the sum of principal and interest as well as home insurance, property taxes, and homeowners association (HOA) fees. The table of values from this graph, known as your amortization schedule, is also shown below.

Limitations

Additional fees can only be estimated as property taxes and insurance for your home. These may vary over time, and you are unlikely to know the exact values ahead of signing your mortgage agreement. This calculator does not work with variable rate loans. Table values are calculated at the beginning of each month.

How can this tool help me?

This tool helps you understand:

• how a small change in interest rate spread over a long period of time can impact your total expenses.
• the difference the duration of the loan makes, and the tradeoff between your monthly payment and total contributions which depends on the loan term.
• how an additional payment can reduce your loan duration and lower your total expenses.

Now you will know what to expect over the course of your loan. With no surprises, this will help you plan the rest of your financial journey.

How can I compare loans?

If you are comparing new loans with different rates or terms, focus on the monthly payment and total contributions to see which one better fits your situation.

If you’re deciding whether to refinance, it’s a bit more complicated. Find out where you are in your current mortgage by using the details of your current loan as input values including the exact start date. In your amortization schedule pay attention to your current month contributions. Figure out how much in total you have left to pay by subtracting your contributions thus far from your total expected contributions.

You will need to know your remaining loan balance. Compare with a new loan but don’t forget closing costs. These can be a lump sum initial payment of typically 1% to 6% of your remaining balance which is used to perform the refinance. Most lenders also allow you to add this to your mortgage principal remaining if you’d rather not pay the sum in cash upfront.

What can I expect to learn?

Generally, longer loan terms have lower monthly payments. However, you end up paying more in the long run because you spread out the interest payments over more years.

Your loan balance decreases slowly at first. In the beginning, the interest portion of your monthly payment is higher than the principal, but this gradually changes. This is how amortized loans work by design.

Even a small additional monthly payment has a huge impact on your loan duration and overall payments. Consider this as an option if you want more financial flexibility when agreeing on longer loan terms. You could, alternatively, just agree on a shorter loan duration if you can manage with the higher monthly payment.