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The tool estimates monthly mortgage payments of taxes, insurance, PMI, HOA fees & more. You can use the mortgage calculator to estimate your monthly mortgage payment. All you need is to input a special home price, deposit, loan term and rate of interest to determine how your monthly payment changes. 

The monthly payment estimates are broken down by principal and interest, property taxes and homeowners insurance for convenience’s sake.

The calculator takes you a step further by factoring in your credit score range, postcode and HOA fees to offer you a more precise payment estimate within minutes. You’ll also be required to enter the home-buying process with a more accurate picture of the way to calculate mortgage payments and buy confidently.

The equation for mortgage payments is as follows:

M = P[r(1+r)^n/((1+r)^n)-1)], where,

M = the total monthly mortgage payment.

P = the principal loan amount.

r = your monthly interest rate. 

Lenders will provide you with an annual rate so you’ll get to divide that given figure by 12 (that is the number of months during a year) to get the monthly rate.

n = the number of payments over the entire loan’s lifetime. 

Simply multiply the number of years in your loan term by 12 in order to get the number of payments for your loan.

Using this tool will facilitate calculation of your mortgage and assist you to decide whether you’re putting enough money down or if you need to adjust your loan term accordingly. 

It’s always a great idea to find a rate-card with various lenders of finance to ensure you’re getting the best deal possible.

Why Do You Need a Mortgage Calculator?

A mortgage payment includes four aspects known as the PITI – principal, interest, taxes and insurance. 

Many home buyers come to realize these costs but what they’re not really prepared for are the hidden costs of homeownership that follow. These include some factors like home owners association fees, private mortgage insurance, routine maintenance, larger utility bills and major repairs.

With the help of the calculator, you also can also adjust your loan and deposit amounts, rate of interest and loan term to ascertain what proportion your payments might undergo change. 

It’s important for you to understand that your specific rate of interest will actually depend upon your overall credit profile, debt-to-income or DTI ratio (that is the sum of all of your debts and new mortgage payment divided by your gross monthly income).

A mortgage calculator may be a springboard that helps you estimate your monthly mortgage payment and understand what it includes. So, your next step after playing with the numbers is getting preapproved by a mortgage lender. 

Applying for a mortgage will provide you with a more definitive idea of how much house you can afford after a lender has vetted your employment, income, credit and finances. You’ll also have a clearer idea of how much money you’ll need to bring to the closing table.