Using Our Mortgage Payment Calculator
It’s important to ensure the home you’re buying aligns with your budget and financial goals. Using our mortgage payment calculator is easy and helps you determine how much of a home you can financially manage. Play around with different interest rates, loan terms and down payment scenarios to find the best combination for your budget and future goals.
Basic Mortgage Calculator
Use the basic mortgage calculator to figure out your total monthly mortgage payment without considering the annual property taxes or homeowners insurance premiums.
Enter the following information:
- Purchase price. The price you’re willing to pay for your new home.
- Down payment. The cash you plan to deposit toward the purchase of the home. The larger your down payment, the less loan you’ll require.
- Term. The period of your home loan, generally measured in years. Mortgage loan terms are typically 15 to 30 years, but Pennymac is proud to offer flex terms. We offer terms of 16 years, 17 years, 18 years and more on most loans.
- Interest rate. The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of money.
Advanced Results
For more accurate results, input all the information in the basic calculator, then switch to the “Advanced” tab and add the following:
- Annual property taxes. A tax assessed on real estate by the local government, usually based on the value of the property (including the land) you own.
- Annual homeowners insurance premiums. Usually required by lenders, homeowners insurance protects the homeowner from weather-related damage, as well as potential liability from events that occur on the property.
Understanding Your Mortgage Calculator Results
Your total payment is displayed at the top. For more detailed results, look at the “Breakdown,” “Over time” and “Amortization” sections.
Breakdown
This section breaks down your monthly payment by the following:
- Principal and interest. This amount, indicated in blue, includes the principal, which is the amount of money you’ll borrow. For example, if your home costs $500,000 and you borrow $350,000, your mortgage will be $350,000. This section also includes the amount of monthly interest you’ll be paying based on the rate and term of your home loan.
- Private mortgage insurance (PMI). If you input a down payment of less than 20%, you’ll see private mortgage insurance included, depicted in yellow. PMI is a policy that protects your lender and is generally required for conventional loans if you don’t put a minimum of 20% down.
- Property taxes and homeowners insurance. Your payment breakdown will also include your property taxes and homeowners insurance premiums if you choose to input those figures.
Typically, property taxes and homeowners insurance are factored into the monthly payment through an escrow account, so adding those figures will give you the best estimate of what you may be expected to pay. Keep in mind that property taxes and homeowners insurance premiums can change and often increase every year. Also take into account any HOA or condo dues. These types of dues can easily add a couple hundred dollars or more to your mortgage payment, and they must be factored into your debt-to-income ratio (DTI).
Over Time
Over time is a view of how much of your monthly payment will go toward principal vs. interest throughout the years. More of your payment will be applied to your principal as you get closer to the end of your mortgage term.
Amortization
The amortization section shows your amortization schedule, a table listing all your scheduled payments throughout your loan term. Get a month-by-month look at your payment, remaining balance, principal and interest paid, and cumulative interest paid.
What Is a Mortgage?
A mortgage is a loan secured against real property, where the property—or home—is collateral. It’s a legal agreement between a lender and the borrower. A mortgage allows a homeowner to pay back the lender in installments over an agreed-upon time period (the term) and interest rate.
How Do I Get a Mortgage?
Getting a mortgage requires applying to a lender. But first, it’s a good idea to determine your budget and the amount you’ll be qualified to borrow. Check out the Pennymac Mortgage Blog for info to help save you money, time and peace of mind during the mortgage process.
How Much Is a Down Payment?
Your down payment amount depends on a few factors. A home down payment of 20% of the purchase price is typically recommended, since this will help you avoid paying private mortgage insurance. But first-time homebuyers may be able to put down less, while certain loan types, such as FHA loans, may have different down payment requirements.
What’s Included in My Mortgage Payment?
A mortgage payment typically includes your loan principal, interest, property taxes and homeowners insurance premium.
Get Your Instant Mortgage Rate Quote
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FAQs
If your loan amount is $100,000, you would multiply $100,000 by 0.005 for a monthly payment of $500. A simpler calculation may be first multiplying the loan amount of $100,000 by the interest rate of 0.06 to get $6,000 of yearly interest, then dividing that $6,000 by 12 to get your monthly payment of $500.
How much is a $300 000 mortgage payment for 30 years? ›
On a $300,000 mortgage with a 6% APR, you'd pay $2,531.57 per month on a 15-year loan and $1,798.65 on a 30-year loan, not including escrow. Escrow costs vary depending on your home's location, insurer, and other details.
What happens if I make 2 extra mortgage payments a year on a 30-year mortgage? ›
Faster Loan Payoff
By making two additional principal payments each year, you'll pay off your loan significantly faster: Without extra payments: 30 years. With two extra payments per year: About 24 years and 7 months.
What is the monthly payment for a $250,000 mortgage? ›
Monthly payments for a $250,000 mortgage
On a $250,000 fixed-rate mortgage with an annual percentage rate (APR) of 6%, you'd pay $1,498.88 per month for a 30-year term or $2,109.64 for a 15-year one. It's important to note that these estimates only include principal and interest.
What is the rule of thumb for calculating a mortgage payment? ›
The 28% rule
The 28% mortgage rule states that you should spend 28% or less of your monthly gross income on your mortgage payment (e.g., principal, interest, taxes and insurance). To determine how much you can afford using this rule, multiply your monthly gross income by 28%.
What is the formula for the monthly payment? ›
Monthly Payment = (P × r) ∕ n
Again, “P” represents your principal amount, and “r” is your APR. However, “n” in this equation is the number of payments you'll make over a year. Now for an example. Let's say you get an interest-only personal loan for $10,000 with an APR of 3.5% and a 60-month repayment term.
What credit score is needed to buy a $300K house? ›
What credit score is needed to buy a $300K house? The required credit score to buy a $300K house typically ranges from 580 to 720 or higher, depending on the type of loan. For an FHA loan, the minimum credit score is usually around 580.
How much income do I need for a 300K mortgage? ›
To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific annual salary will vary depending on your credit score, debt-to-income ratio, type of home loan, loan term, and mortgage rate. Homeownership costs like HOA fees can also impact affordability.
What's the average mortgage payment on a $200,000 house? ›
At a 7% interest rate, a 30-year fixed $200K mortgage has a monthly payment amount of $1,331, while a 15-year fixed $200K mortgage at the same interest rate has a monthly payment amount of $1,798.
What happens if I pay an extra $200 a month on my mortgage? ›
If you pay $200 extra a month towards principal, you can cut your loan term by more than 8 years and reduce the interest paid by more than $44,000. Another way to pay down your mortgage in less time is to make half-monthly payments every 2 weeks, instead of 1 full monthly payment.
The 2% rule states that you should aim for a 2% lower interest rate in order to ensure that the savings generated by your new loan will offset the cost refinancing, provided you've lived in your home for two years and plan to stay for at least two more.
When should you not pay extra on a mortgage? ›
It may not be a good idea to focus on paying off your mortgage early if you have other debt to worry about. Credit card debt, student loan debt and other types of loans often have higher interest rates than most mortgages. This means they accrue interest faster.
How much income do I need for a 250k mortgage? ›
If you follow the 2.5 times your income rule, you divide the cost of the home by 2.5 to determine how much money you need to earn annually to afford it. Based on this rule, you would need to earn $100,000 per year to comfortably purchase a $250,000 home.
Can you buy a house with 40k salary? ›
On a $40,000 salary, you could potentially afford a house worth between $100,000 to $140,000, depending on your specific financial situation and local market conditions. While this may limit your options in many urban areas, there are still markets where homeownership is achievable at this income level.
How to pay off a $250,000 mortgage in 5 years? ›
There are some easy steps to follow to make your mortgage disappear in five years or so.
- Setting a Target Date. ...
- Making a Higher Down Payment. ...
- Choosing a Shorter Home Loan Term. ...
- Making Larger or More Frequent Payments. ...
- Spending Less on Other Things. ...
- Increasing Income.
With a $70,000 annual salary and using a 50% DTI, your home buying budget could potentially afford a house priced between $180,000 to $280,000, depending on your financial situation, credit score, and current market conditions. This range is higher than what you might qualify for with more traditional DTI limits.
How do I calculate how much of a mortgage I can afford? ›
With a FHA loan, your debt-to-income (DTI) limits are typically based on a 31/43 rule of affordability. This means your monthly payments should be no more than 31% of your pre-tax income, and your monthly debts should be less than 43% of your pre-tax income.
Which formula should be used to correctly calculate the monthly mortgage payment? ›
The correct formula to calculate the monthly mortgage payment is m = p * (r * (1 + r)^n) / ((1 + r)^n - 1). This formula considers the principal amount, monthly interest rate, and the total number of payments to determine the fixed monthly payment required to repay the mortgage loan over the specified period.
How to calculate monthly payment on a loan manually? ›
The formula is: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1], where M is the monthly payment, P is the loan amount, i is the interest rate (divided by 12) and n is the number of monthly payments.
