Mortgage Calculator: Estimate Your Monthly Payments
Estimate your monthly mortgage payments, including principal, interest, taxes, and insurance (PITI), with SBJ Global's easy-to-use calculator.
Mortgage Calculator
Enter the details of your loan to estimate your monthly mortgage payment.
Understanding Mortgage Payments
A mortgage payment is the monthly amount a homeowner pays to their lender. It typically includes four components: Principal, Interest, Property Taxes, and Homeowner's Insurance (PITI).
Key Components of a Mortgage Payment
Here’s a breakdown of the different components:
- Principal: The initial amount borrowed to purchase the home.
- Interest: The cost of borrowing the money, expressed as an annual percentage.
- Property Taxes: Annual taxes levied by the local government, often divided into monthly payments.
- Homeowner's Insurance: Annual insurance premiums to protect the home against damage or loss, also divided into monthly payments.
How Our Mortgage Calculator Works
Our calculator makes it simple to estimate your monthly mortgage payment. Here’s how to use it:
- Enter Home Price: Input the total purchase price of the home.
- Enter Down Payment: Specify the amount you are paying upfront.
- Enter Interest Rate: Enter the annual interest rate on the mortgage.
- Enter Loan Term: Specify the length of the loan in years.
- Enter Annual Property Taxes: Input the total annual property taxes.
- Enter Annual Homeowner's Insurance: Enter the total annual cost of homeowner's insurance.
- Click Calculate: The calculator processes these inputs and displays your estimated monthly payment.
The Mortgage Payment Formula
The formula to calculate the monthly principal and interest (P&I) payment is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
- M = Monthly payment (Principal + Interest)
- P = Loan principal (Home Price - Down Payment)
- i = Monthly interest rate (Annual Interest Rate / 12)
- n = Number of months (Loan Term in Years * 12)
The total monthly payment is the sum of M (monthly P&I), monthly property taxes, and monthly homeowner's insurance.
Example Calculation
For example, if you purchase a home for $300,000 with a $60,000 down payment, an interest rate of 4%, a loan term of 30 years, annual property taxes of $3,600, and annual homeowner's insurance of $1,200, your monthly payment would be calculated as follows:
P = $300,000 - $60,000 = $240,000
i = 4% / 12 = 0.00333
n = 30 * 12 = 360
M = $240,000 [0.00333(1 + 0.00333)^360] / [(1 + 0.00333)^360 - 1] ≈ $1,145.80
Monthly Property Taxes = $3,600 / 12 = $300
Monthly Homeowner's Insurance = $1,200 / 12 = $100
Total Monthly Payment = $1,145.80 + $300 + $100 = $1,545.80
Factors Influencing Your Mortgage Payment
Several factors can impact your monthly mortgage payment:
- Home Price: A higher home price generally leads to a larger mortgage and higher payments.
- Down Payment: A larger down payment reduces the loan amount and can lower your monthly payments.
- Interest Rate: Fluctuations in interest rates directly affect the cost of borrowing.
- Loan Term: Shorter loan terms typically result in higher monthly payments but lower total interest paid over the life of the loan.
- Property Taxes & Insurance: These costs can vary depending on location and coverage.
Estimate vs. Actual
The monthly payment from a mortgage calculator is only an estimate. You should get pre-approved for a mortage to determine accurate numbers.