Plan your home purchase before you buy. Enter the home price, down payment, interest rate and loan years to see your monthly mortgage payment and total interest.
1. Enter the home price and your down payment. 2. Enter the yearly interest rate and the loan term in years. 3. Click Calculate Mortgage.
A mortgage is a long-term loan used to buy a home, and the house itself is the security for the loan. A mortgage calculator shows what that loan will cost you every month, so you can decide how much house you can really afford before you start looking. Enter the home price, the down payment, the interest rate and the number of years, and this free mortgage calculator shows your monthly payment, the total interest and the total amount you will pay over the life of the loan.
Buying a home is the biggest purchase most people ever make, and the monthly payment is the number that decides whether a home fits your budget. A small change in the interest rate or the loan term can change the payment by thousands a month. Checking the numbers first lets you compare homes at different prices, see the effect of a bigger down payment, and walk into a bank meeting knowing exactly what you can afford.
Take a home that costs 5,000,000 with a down payment of 1,000,000, so the loan is 4,000,000. At an interest rate of 9 percent per year for 20 years (240 months), the monthly payment is about 35,989. Over 240 months you will pay about 8,637,369 in total, which means about 4,637,369 is interest. That is more than the loan itself, which is why the interest rate and the loan term matter so much. Try changing the term to 15 years in the calculator above and watch the monthly payment rise and the total interest fall.
A mortgage uses the same EMI formula as any other loan: monthly payment = P times r times (1 + r)^n divided by ((1 + r)^n minus 1). Here P is the loan amount (home price minus down payment), r is the monthly interest rate (yearly rate divided by 12 and by 100), and n is the number of monthly payments (years times 12). For the example above, r is 0.0075 and n is 240. Remember that the real monthly cost of a home is more than the loan payment: add property tax, insurance and maintenance to your budget.
Save a bigger down payment. A 20 percent down payment usually means a smaller loan, a lower monthly payment and less total interest, and it may avoid extra insurance charges. Compare 15-year and 20-year loans. A shorter loan costs more each month but can save you a huge amount of interest over the full term. Check your monthly budget first. Add tax, insurance and maintenance to the loan payment, and make sure the total is comfortable, not just possible. Ask about fixed and floating rates. A fixed rate keeps your payment the same, while a floating rate can rise or fall. Get pre-approved before house hunting. Knowing your real loan limit stops you from falling in love with a home you cannot afford.
Suppose you buy a home for 8,000,000 and pay a down payment of 1,600,000, so the loan is 6,400,000. At an interest rate of 10 percent per year over 25 years (300 months), this mortgage calculator gives a monthly payment of about 58,157. Over 300 months you will pay about 17,447,054 in total, which means about 11,047,054 is interest — more than the loan itself. This shows why the interest rate and the loan period matter so much: a small change in either one changes the total cost by hundreds of thousands.
Forgetting the down payment. The loan is the home price minus the down payment, not the full home price. Ignoring extra costs. Taxes, insurance, registration and maintenance add to the real cost of owning a home. Choosing the longest loan by default. A 30-year loan has a lower monthly payment but far more total interest than a 20-year loan. Not comparing banks. Even half a percent difference in the rate can save or cost you hundreds of thousands over the loan. Borrowing the maximum possible. A large mortgage leaves no room for emergencies, repairs or a drop in income.
Pro Tip: Pay a bigger down payment if you can. Every extra rupee of down payment reduces the loan, the monthly payment and the total interest.
Note: This calculator estimates the loan payment only. Taxes, insurance, registration fees and bank charges are not included, so your real monthly cost will be a little higher.
What is a mortgage? A mortgage is a long-term loan for buying a home. The bank lends you most of the price, and you repay it in monthly payments over many years. The house is the security: if you cannot pay, the bank can sell it.
What is a down payment? The down payment is the part of the home price you pay yourself at the start. For a 5,000,000 home with a 1,000,000 down payment, the loan is 4,000,000. A bigger down payment means a smaller loan.
Does a longer mortgage mean a lower payment? Yes, but you pay much more total interest. A 20-year loan has lower monthly payments than a 15-year loan, but the total interest is far higher.
Is the monthly payment the full cost of the home? No. Add property tax, home insurance and maintenance to the loan payment to get the real monthly cost of owning the home.
What is the difference between a mortgage and a home loan? They are the same thing in most countries. "Mortgage" is the common word in the USA and the UK, and "home loan" is the common word in Pakistan and India.
Can I pay my mortgage off early? Most lenders allow it, but some charge a fee. Paying extra each month reduces the interest a lot, so ask your bank about the rules before you sign.
What is an adjustable-rate mortgage? An adjustable-rate mortgage starts with a fixed rate for a few years, and then the rate can go up or down with the market. The starting rate is usually lower than a fixed-rate mortgage, but your monthly payment can change later, so it carries more risk.
How much down payment do I need? Most banks ask for at least 10 to 20 percent of the home price. A bigger down payment usually gets you a better interest rate and a lower monthly payment.
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