Mortgage Calculator

Mortgage calculator helps you to quickly calculate the monthly home loan payment, based on the loan amount, your down-payment, and annual percentage rate (APR) on your mortgage.

With mortgage rates being the lowest in more than half a century – in the low 4% range – this may be the best time to refinance your home loan or buy a new house.

Calculate your mortgage payment now

Home Value: $
Loan amount: $
Interest rate / APR : %
Loan term (years) : years
Mortgage Monthly Payment:

Different types of home mortgages

The mortgage industry is so diverse today, there are more that a dozen of common home loan types, ranging from typical fixed-rate mortgage and adjustable ARM mortgages, to new Pick-a-payment type loans. With a fixed rate mortgage, you know that your monthly payment will always be the same, where as the adjustable mortgage payment may, and most likely will change, and often upward.

As shorter loan term will usually offer a lower APR (annual percentage rate or interest) on your mortgage. For example a difference between a 30 years fixed mortgage and a 15 years fixed mortgage can be as much as 1 percent, or even more.

Which mortgage type should you choose? There is really no right answer, and we can’t give you any advice on that. However, if you have an adjustable rate mortgage or ARM, you may start with a very low APR. However when your adjustment starts, you mortgage payment may increase by a significant amount, if the mortgage rate have risen, since you originated your loan.

Why you want to be cautious with ARM and other adjustable payment mortgages:

In our personal experience with Pick-A-Payment mortgage, our initial APR was about 5.4% on a $280,000 home loan originated in 2005. At that interest rate, our monthly payment was $1,572, excluding Taxes and Insurance. In a matter of short 2 years our adjustable APR jumped to 9.1% and our mortgage payment went up to $2,273. That is exactly $701 per month increase in our mortgage payment – principal and interest alone.

Fortunately we were able to cope with the increase in mortgage payment by occasionally locking our interest rate for a 12 months period, at a fee of $300, which was substantially cheaper that paying extra interest. Later, we refinanced our mortgage. However we were locked into a pre-payment penalty of 5% of total loan amount for 3 years, so it was cheaper to wait those 3 years out that to pay the penalty.

This is not really a mortgage horror story, but a caution to someone considering an adjustable rate mortgage. While the APR on a fixed rate mortgage may be lower and ARM interest rate may be more appealing, unless you plan to sell your property before the interest rate adjusts, you might consider getting a slightly higher APR of a fixed rate mortgage.

October 25th, 2010