How to use the mortgage calculator
- Enter the Price of Real Estate
- Enter the Down Payment Percent or Down Payment Amount.
- Set Mortgage Loan Amount to 0 (if unknown).
- Enter the expected Number of Payments.
- Enter the anticipated Annual Interest Rate.
- Set Mortgage Payment (P & I only) to 0 (if unknown).
- Optionally set the Mortgage Closing Date
- Optionally set the First Payment Due Date
- Optionally enter Points
- Click either Calc or Pmt & Cost Schedules for the answers.
That's it! That's how to calculate a mortgage payment.
But there's a lot more you can learn from this 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 payment schedule using whatever parameters you want to use. Such behavior 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.
Notes about this calculator
Found on the "Set Dates or XPmts" tab:
- Mortgage Closing Date - also called the loan origination date or start 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 can do penny perfect calculations.
This will result in payment amounts and 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.
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.
- 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.
- Mortgage Payment (P & I only) - the amount 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.
Mortgage options you may want to tweak:
- 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.
- Calc. & Include APR on Schedule - when "Yes," the mortgage schedule shows in a Regulation Z compliant format, the APR.
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, by themselves, increases the APR. However, borrowers pay mortgage points in order to obtain a lower interest rate. The combination of points and the lower rate should result in an overall lower APR. Check the APR option to find out. optional
Hopefully, you'll find this to be a full-featured mortgage calculator. If something is not clear, you may leave your question in the comments below