Mortgage Loan Calculator

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Mortgage Calculator is designed to estimate outstanding monthly payments with other financial costs such as property tax, home insurance and more. It gives accurate estimated results on monthly as well as annual basis. The calculator is mainly designed in accordance with US laws & regulations. However, you can calculate and convert the results into you local currency.
What is Mortgage
A mortgage is a type of loan used to purchase property, usually home or real estate property. The borrower (mortgagor) agrees to repay the lender (mortgagee) within a stipulated period, typically 15 to 30 years, with interest. The property remains collateral which means the lender can seize it at any time, if the borrower fails to repay the loan.
Each month, an specific amount is paid to lender by the borrower. The amount borrowed to buy the property is called the principal, which is the original amount borrowed. The cost of borrowing the money is termed as percentage rate. The length of time over which the loan is repaid (e.g., 15, 20, or 30 years) is called the Term. Amortization is the process of paying off the loan through regular monthly payments that cover both principal and interest.
The buyer/borrower cannot be termed the full owner of the mortgaged property until and unless the last monthly payment is made. In the U.S., the most popular and common mortgage loan is the conventional 30-year fixed-interest loan, which represents 70% to 90% of all mortgages. This is the most commons way, how most of US people are able to buy their dream homes. If you want to get Mortgage loan, take a look at this.
Important terms used in Mortgage Calculator

Following are the basic components of a mortgage calculator.
Loan or principle amount: The amount borrowed from a lender (mortgagee) or bank to buy the property. It is considered after minus of down payment in a mortgage. Borrowing loan amount depends upon affordability and income of a borrower which can be repaid easily.
Interest rate: The cost incurred on borrowing the money is called interest rate. There are two types of Mortgages that are fixed-rate mortgages (FRM) and adjustable-rate mortgages (ARM). In the fixed rate mortgages, interest rate remains the same, whereas adjustable rate mortgages varies. Above given calculator, calculates fixed rates only.
Fixed Interest rates are generally fixed for a period of time and after that period they will be periodically adjusted according to market indices. In the ARMs risk transfers to borrowers. Initial interest rates are normally between 0.5% to 2% which is lower than FRM in the same loan term. Mortgage interest rates are usually calculated in Annual Percentage Rate (APR), and termed as nominal APR or effective APR. It is the interest rate expressed as a periodic rate multiplied by the number of compounding periods in a year. For example, if a mortgage rate is 5% APR, it means the borrower will have to pay 5% divided by ten, which comes out to 0.5% in interest every month.
Loan term: The period of time over which the loan must be repaid. Most fixed-rate mortgages are for 15, 20, or 30-year terms. Shorter the period means shorter the interest rate.
Down payment: The initial payment made by the borrower usually a percentage of property price i.e 10% - 20%. The procedure is that lenders claim the borrower to put 20% or more as a down payment. Sometimes, borrowers may pay as low as 3%, in such case, they have to pay private mortgage insurance (PMI). Mortgagors required to hold this insurance until the loan's remaining principal dropped below 80% of the total purchase price. A general rule-of-thumb is that the higher the down payment, the more favorable interest rate and the more chances of loan approval.
What Recurring Costs Can be applied?
Recurring costs are major factors throughout the period of a mortgage payment. Taxes i.e Property taxes, home insurance, and other costs increase with time and inflation. We have included the recurring costs under the add additional cost checkbox. Putting these values can results more accurate. Here is the more detail about these recurring costs.
Property tax is a tax that property owners pay to governing authorities. In the U.S., property tax is managed by municipal or county governments. Property taxes are imposed on the property at the local level. As an average estimates, Americans pay about 1.1% of their property's value as property tax each year depending upon the location.
Home insurance is an insurance policy that protects the owner from accidents such as in recent days, Los Angles Fires burned the major parts of the city. It also secure home owner from the lawsuits. The home insurance cost varies based on location, condition of the property and the loan amount.
Private mortgage insurance secure and protects the mortgage lender in case the borrower is unable to repay the loan. As discussed above, if the down payment is less than 20% of the property's value, the lender needs to purchase PMI until the loan-to-value ratio (LTV) reaches 80% or 78%. PMI price varies depending upon down payment, period of the loan, and credit of the borrower. The annual cost typically ranges from 0.3% to 1.9% of the loan amount.
Homeowner’s association fee is a fee levied on the home owners by a homeowner's association (HOA). This association is an organization that regulates and improves the property and environment within its jurisdiction. Annual fees usually amount to less than 1% of the property value.
How a Mortgage is Calculated:
The monthly mortgage payment is typically calculated using an amortization formula, which includes both principal and interest. The formula is:
M=P⋅ (1+r) n −1 r(1+r) n
Where:
M M = Monthly mortgage payment
P P = Principal loan amount
r r = Monthly interest rate (annual interest rate divided by 12)
n n = Total number of payments (loan term in years multiplied by 12)

What are Non-Recurring Costs
These costs have also deep impact alongwith recurring costs. These costs include, closing fee of real state transaction, attorney fee, recording fee, survey fee, brokerage fee and more. Sometimes homeowners want to renovate their house before shifting. These renovations include, repainting, kitchen settings, interior improvements etc. These costs are not handled by our calculator but are important to keep in mind.
Early and Extra Payments
In some cases, borrowers may want to pay off loan earlier for saving interest rates, selling home, or other reason. Here are the advantages and disadvantages of early payment.
How can a mortgagor repay early?
Mortgagor can pay off their loan early in the following manner:
Pay extra amount from monthly installment or make an extra payment over and above the monthly payment. Any extra amount will lower the loan balance, resultantly, decreasing interest and making the borrower to be able to pay off the loan earlier. Anyone can pay extra amount every month, or whenever they can.
The borrower can pay after every two weeks in a month. This is the best way to get rid of the loan payment.
Reasons for early repayment
Making extra payments offers the following advantages:
• Lower interest costs
• Shorter repayment period
• Personal satisfaction
Conclusion:
This mortgage calculator is online, completely free and does not require any sign up tidy procedure. By using this calculator you can accurately calculate recurring amounts pay off schedule.