Q:

How can you estimate what your mortgage payment will be?

A:

Quick Answer

An estimate of a mortgage payment is calculated by summing the payments required for monthly principal, interest, real estate taxes, private mortgage insurance, and other inclusions such as property insurance installments, states HomeFinder.com. Online mortgage calculators help to readily estimate mortgage payments and scenarios, given known values.

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Full Answer

An online mortgage calculator requires the entry of the total loan amount, the loan interest rate, the loan term in years, the property tax percentage, and the percent for private mortgage insurance, or PMI, as exemplified by MortgageCalculator.org. The basic output of the calculator typically includes a total monthly or biweekly payment amount, and the portions of payments allocated to PMI and taxes may also be provided. Some calculators request a loan start date so that a complete amortization schedule can be computed, detailing monthly amounts of principal and interest payments over the term of the loan. Many calculators also report totals paid for principal, interest, taxes and PMI over the life of the loan.

Additional fees and payments impact the regular payment amount, notes HomeFinder.com. A down payment on the loan reduces the loan amount and the resulting installments. Financing mortgage closing costs as part of the loan increases payments. By law, PMI payments can be terminated once the principal balance remaining on the loan is less 80 percent or less of the original home value, reducing the regular installment payment amount, according to the Consumer Financial Protection Bureau.

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