Set the home price, your down payment, the interest rate, and the loan length. The calculator shows your monthly principal and interest payment, plus the total interest you would pay over the life of the loan.
The tool uses the standard amortization formula lenders use. Your loan amount is the price minus the down payment, and the monthly payment is calculated so the loan reaches exactly zero at the end of the term. The chart shows the balance falling year by year.
Notice how slowly the balance drops in the early years. That is because early payments are mostly interest. It also shows why a 15 year loan, or extra principal payments on a 30 year loan, saves so much interest over time.
No. The payment shown covers principal and interest only. Property taxes, homeowners insurance, and possibly mortgage insurance and HOA dues come on top, often adding several hundred dollars a month.
Private mortgage insurance is usually required when your down payment is under 20 percent on a conventional loan. It typically costs 0.5 to 1.5 percent of the loan amount per year until you reach 20 percent equity.
A 15 year loan carries a higher monthly payment but a lower rate and dramatically less lifetime interest. Run both terms in the calculator and compare the totals before you decide.
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