Ultimate Mortgage Calculator™

IMPORTANT - Always enter (and reenter) a 0 if you want a value calculated.

Why doesn't the calculator automatically recalculate the last unknown?

We want the calculator to create an amortization schedule using whatever parameters you want to use. This is a feature!

By not automatically recalculating the payment (for example) when the mortgage amount changes, this calculator lets those users create a payment schedule with whatever payment amount they want.

The Calculator Explained in Detail

There are only six values you will usually need to set.

Found on the "Calculator" tab:

• Price of Real Estate or Asset - the negotiated purchase price. This is optional. Enter a zero to calculate.
• Down Payment Percent - the anticipated down payment expressed as a percent of the purchase price. optional
• Down Payment Amount - the anticipated down payment expressed as an amount. optional
• Mortgage Loan Amount - the amount of the mortgage loan. This too is optional. Enter a zero to calculate.

You may:

• Enter the real estate price and the down payment to calculate the mortgage amount.
• Enter the mortgage amount and down payment to calculate the affordable real estate amount.
• Or enter the mortgage amount and zero for the down payment and price.

• Number of Payments - the length of the loan. The "Payment Frequency" setting also impacts the loan's term. For a term of thirty years, if the payment frequency is monthly, you need to enter 360 for the number of payments. (360 monthly payments = 30 year mortgage)
• Annual Interest Rate - the nominal interest rate. This the quoted interest rate for the mortgage.
• Payment Amount (P & I only) - the amount that is due on each payment due date. The amount includes only principal and interest. Do not include any additional amounts for taxes or insurance if you enter a value.

If the Mortgage Loan Amount is either set or calculated off the real estate price, then one of the above three can be set to zero so that the calculator can calculate it.

Now, armed with this information, you can answer these FAQs.

• What is the monthly payment on a $300,000 mortgage?
  1. enter $300,000 for the mortgage loan amount.
  2. enter 360 for number of payments
  3. enter 4.5% for the annual interest rate, and
  4. set the P&I payment amount to zero. (0 indicates "Unknown.")
  5. calculate the result - $1,520.06
• What house price can I afford?
  1. set the price of real estate to zero. (0 indicates "Unknown.")
  2. enter the expected down payment amount or percent
  3. enter the desired mortgage amount, or set it to zero if unknown.
  4. enter the number of payments
  5. enter the annual interest rate, and
  6. enter the expected P&I payment
  7. calculate
• What size mortgage can I afford?
  1. enter the price of real estate (optional)
  2. enter either a down payment amount or percent (optional)
  3. set the mortgage loan amount to zero. (0 indicates "Unknown.")
  4. enter the number of payments
  5. enter the annual interest rate, and
  6. enter the expected P&I payment
  7. calculate
• How long will it take me to pay back the mortgage?
  1. enter the price of real estate (optional)
  2. enter either a down payment amount or percent (optional)
  3. enter the mortgage loan amount.
  4. set the number of payments to zero. (0 indicates "Unknown.")
  5. enter the annual interest rate, and
  6. enter the expected P&I payment amount
  7. calculate
• What interest rate allows me to have a $2,000 mortgage payment?
  1. enter the price of real estate (optional)
  2. enter either a down payment amount or percent (optional)
  3. enter the mortgage loan amount.
  4. enter the number of payments
  5. set the annual interest rate to zero (0 indicates "Unknown."), and
  6. enter the expected P&I payment amount
  7. calculate
• What's the balloon payment on a $300,000 mortgage after 6 years with periodic payment based on a 30-year term and 4.5% rate?
  1. enter the mortgage loan amount $300,000
  2. enter the number of payments for the full term: 360
  3. set the annual interest rate: 4.5%, and
  4. set the P&I payment amount: 0 (unknown)
  5. calculate payment: $1,520.06
  6. enter the number of payments for the balloon term: 72
  7. click on Pmt & Cost Schedules and check the 72 payment - 269,267.61.

Result Summary

• Total Interest - assuming the borrower makes the payments as scheduled, this is the interest they will pay over the term of the mortgage.
• Total Prepaid Principal (XPmts) - this is the total of the optional extra payments. The total interest saved is reported on the payment schedule.
• Total Principal & Interest - the loan amount plus the total interest paid. Thus the total amount you'll pay for the mortgage, which of course does not include any escrow amounts.
• ROI/Appreciated Value - return-on-investment explained and the estimated value of the property at the end of the mortgage.
• LTV / APR - Loan-to-value ratio. If LTV is 80% or greater, the lender may insist on the borrower obtaining private mortgage insurance. Use the annual percentage rate to compare mortgage offers. The lower the APR, the better. For accuracy, make sure you enter any "Points" or "other charges." Background APR information.

Mortgage options you may want to tweak.

Found on the "Set Dates or Extra Payments" tab:

• Mortgage Closing Date - also called the loan origination date.
• First Payment Due - due date for the first payment

About Dates & Interest Calculations - In the real world, the time between the mortgage origination date and the first payment due date will seldom be equal to the payment frequency.

Your mortgage can require monthly payments, but in reality, you might go to the closing on July 15, and the first payment might not be due until September 1. Such a scenario leads to what is commonly called a "long initial period" and "odd days interest." (Had the first payment been due on August 1, then the first period would be called an "initial short period.")

Long and short first periods impact interest and payment calculations.

By giving users the ability to enter these two dates, this calculator is capable of penny perfect calculations.

But, this will result in payment amounts as well as interest charges that do not match other calculators.

And that's the point! You do not need to settle for estimates.

(If you are satisfied with approximations, however, or you want to match other calculators, then set the "Mortgage Closing Date" and "First Payment Date" so that the time between them equals one full period as selected in "Payment Frequency." Example: If the "Mortgage Date" is July 15 and the "Payment Frequency" is "Monthly," then the "First Payment Date" should be set to August 15.)

More details about the available calculation options for odd day and irregular period interest.

• Payment Frequency - set how often payments are scheduled. The calculator supports 11 options, including biweekly (every other week), monthly, and annually. The schedule calculates the payment due dates from the first payment due date (not the mortgage closing date).
• Compounding - usually, you should set the compounding frequency to be the same frequency as the payment frequency. Doing so results in simple, periodic interest. Setting this option to "Exact/Simple" results in simple, exact day interest.
• Days-Per-Year - 360/364/365 days per year option. This setting only impacts interest calculations when you set compounding frequency to a day based frequency (daily, exact/simple or continuous) or when there are odd days caused by an initial short or long period.
• Amortization Method - leave this setting set to "normal" unless you have a specific reason for setting it otherwise. For a complete explanation of these options, see Nine Loan Amortization Methods.
• Rounding Options - due to interest and payment rounding with each payment (for example, payment or interest might calculate to 345.0457, but a schedule will need to round the value to 345.05), almost all loan schedules require a final rounding adjustment to bring the balance to "0". A footnote on the payment schedule informs you of the rounding amount.
• Long Period Options (odd day interest) - setting for how interest is shown on the mortgage schedule when the initial period is longer than the selected payment frequency.
• Short Period Options - setting for how payments get adjusted when the initial period is shorter than the selected payment frequency.

More details about the settings for odd day and irregular period interest.

• Fiscal Year-End for Report Totals - this setting establishes after what month the calculator shows year-end and running totals. This option is to accommodate businesses with fiscal year ends that do not coincide with the calendar year-end.
• Calc. & Include APR on Schedule - when "Yes," the mortgage schedule shows in a Regulation Z compliant format, the APR.
• Extra Payment Amount - to include a series of additional payments or a single extra payment, enter the amount here.
• Extra Payments Start - enter the date you want extra payments to start. The date does not have to align with any payment due date. If you pay the mortgage monthly and payments are due on the first, you may want to make extra payments on the 15th to align with your pay periods.
• Extra Payment Frequency - set how frequently you plan to make additional payments. Want to make extra payments annually when you receive a year-end bonus? This calculator will accommodate such a plan.
• Number of Extra Pmts - enter one or any integer value. If you want to make the extra payments until the mortgage is paid off, enter "U" for "Unknown."

Found on the "Options" tab:

• Points - calculated using the loan amount, they are reported in the first row of the schedule. One point is one percent of the mortgage loan amount. Points impact the APR calculation. optional
• Other Charges & Fees - When applying for and closing on a mortgage, the borrower will frequently have to pay one-time fees and charges. You enter those charges here. These fees and charges also impact the APR calculation. It is essential to understand what charges to include. Background APR information optional
• Annual Property Taxes - are included in the escrow column on the schedule. Please be sure to enter a yearly amount in the calculator. optional
• Annual Insurance - the escrow column on the mortgage schedule also includes property-casualty insurance. optional
• Private Mortgage Insurance (PMI) - may be required by the lender if your loan-to-value (LTV) is more than 80%. That is, your down payment frequently needs to be 20% or more to avoid PMI. optional
• Your Marginal Tax Rate - used to calculate the personalized tax benefits of a mortgage. optional
• Annual Maintenance - used in total cost and rent vs. buy analysisoptional
• Monthly Rent - used in the rent vs. buy analysis optional
• Property Appreciation Rate (est) - estimated annual house price appreciation. Used to calculate a potential selling price for the property at the end of the mortgage. optional
• Include cost & appreciation schedule after the loan schedule - if checked, the calculator will create an additional, printable schedule after the mortgage schedule. optional
• Average Inflation Rate on Costs - used in the rent vs. buy calculations. Enter an estimated inflation rate. Impacts costs and rent. optional
• Include in ROI Calculation - when calculating an ROI, you may include only the mortgage cost or the mortgage and other costs such as maintenance. Background ROI information

Printable Mortgage Amortization Schedule

The Ultimate Mortgage Calculator automatically selects from three amortization schedule layouts. If you've not entered values for any of the above options, then the UMC displays a simplified schedule showing only the payment along with the principal interest and loan balance.

The optional, new "Inflation-Adjusted Cost and Appreciation Schedule" tracks mortgage costs and other costs such as maintenance and optionally adjusts them to account for projected inflation.

Wrapping-Up

Hopefully, using the Ultimate Mortgage Calculator to give you insights into mortgages and how they work. It is certainly my desire that those insights will save you some significant money.

Of course, if something is not clear, or if you wish to question anything written here, feel free to let me know in the comment section below. Usually, I reply within 24 hours.