Home Mortgage Calculator

How does this home mortgage calculator work?

This is a personal finance app that can estimate the regular monthly payment value in case of a home mortgage by assuming the interest and the term are fixed.

By the two tabs it has (Without taxes tab and With taxes tab) it offers two methods to simulate the loan plans as explained below:

- First tab of this home mortgage calculator allows you to make complex calculations on your monthly payments as it considers all the important aspects related to this financial product. Thus, apart from the mortgage amount, down payment (value or percent), payment frequency, interest and term you can specify the annual property tax rate, the annual home insurance cost, the annual PMI insurance rate and the annual HOA dues/fees (where the case to be given). By this approach you will get a more relevant figure on how much your monthly effort will be, practically you will get the monthly total out of pocket. The results returned in this case consist in:

■ Monthly Payment amount (principal + interest).
■ Monthly property tax value.
■ Monthly PMI insurance cost.
■ Monthly HOA dues/fees value.
■ Other monthly fees & costs.
■ Monthly total out of pocket.
■ Home price.
■ Loan amount borrowed.
■ Down payment.
■ Total paid.
■ Total interest paid.
■ Loan term.
■ Annual interest rate.
■ Payment frequency selected.
■ Estimated payoff date plus a detailed payment schedule.

- Second tab can be used to determine in a quick and simple way a rough level of your monthly mortgage payment as it requires to fill in only the amount borrowed, fixed annual interest percent, a desired payment frequency and the term. The results displayed in this case are:

■Monthly payment value (principal + interest paid each month).
■ Loan amount borrowed.
■ Total paid for the loan.
■ Total interest paid.
■ Loan term in moths.
■ Annual interest rate.
■ Payment frequency.
■Estimated payoff date together with a detailed amortization schedule if requested.

Example of a calculation result

Example 1: In case of a home price or $250,000, in case someone has a down payment of $50,000 for a mortgage taken over 30 years, at an average fixed interest rate of 3.9%, with annual  home insurance of $3,000, HOA dues of $1,000 and other fees of $1,000 the following results are displayed:

■ Monthly Payment: $943.34
■ Monthly property tax: $250.00
■ Monthly home insurance: $250.00
■ Monthly PMI insurance: $72.92
■ Monthly HOA dues/fees: $83.33
■ Other monthly fees & costs: $83.33
■ Monthly total out of pocket: $1,682.92
■ Home price: $250,000.00
■ Loan amount borrowed: $200,000.00
■ Down payment: $50,000.00
■ Total Paid: $339,601.11
■ Total Interest Paid: $139,601.11
■ Loan term: 360 months
■ Annual Interest rate: 3.90%
■ Payment frequency: Monthly
■ Payoff date: December, 2044

Example 2: For a home loan of$200,000, taken over 20 years at a fixed average interest rate of 3.75% paid monthly the following figures are displayed:

■ Monthly payment: $1,185.78
■ Loan amount: $200,000.00
■ Total Paid: $284,586.39
■ Total Interest Paid: $84,586.39
■ Loan term: 240 months
■ Annual Interest rate: 3.75 %
■ Payment frequency: Monthly
■ Payoff date: December, 2034

What is a home mortgage?

In finance, the home mortgage is a product designed to help borrowers purchase a home. It is actually made up of few parts as explained in these lines:

• The collateral used to secure the loan which is stated within the agreement signed and is represented by the home value itself. By this condition the borrower agrees to repay the principal and interest within the term negotiated otherwise the lender has the right to take back the house, sell it and obtain the cash that was paid to you. Please remember that a default in a home mortgage affects the client’s credit rating and so impacts his ability to buy a new home in the future by taking another mortgage.

• The principal and interest payments (monthly or the so called regular payments). By these payments the borrower pays out his debt by following a plan negotiated with the lender, that is usually called the amortization schedule. The principal is considered the exact amount of money borrowed, practically is the value of the contract that is obtained by subtracting the down payment from the home price. Please note that the level of the down payment depends on the lender’s requirements. Its percent rate varies from 5% to 30% or more. The higher the down payment level, the less interest the customer will pay in the end. The interest is the cost of the money borrowed usually expressed as an annual percentage applied to the principal balance of a specific year. As this type of loan is usually taken for a period of time that varies from 15 to 30 years the mortgage rates are variable.

• Taxes and assimilated costs that are a category of costs everyone searching for a mortgage should take into account, as apart from the principal and interest regular payments there are property taxes, HOA dues and other fees that should be paid off monthly.

• Insurance is one important aspect that is directly related to the down payment percent from the home price. In case of a conventional loan where the down payment is less than 20 percent of the home’s total price, the lender will most probably ask the borrower to pay a private mortgage insurance.  Often abbreviated as PMI this insurance type protects the creditor from a borrower’s default on the mortgage. Usually the PMI payments are made for up to few years (usually two – three) until the principal balance left to be paid shrinks to 78 percent of the home’s initial price.

By using the first tab of this home mortgage calculator the simulation of the total monthly effort including taxes, costs and insurance can be easily estimated.