When going through the process of buying a home, one of the primary steps you must take is finding out how much money you have available to use as a down payment. It is also essential to figure out what your monthly costs are going to be based on your down payment, loan term and interest rate. This mortgage calculator will do all the math for you in just a few seconds and give you a better idea as to what you will be paying over a set period of time.
3 Ways to Use a Mortgage Calculator
Most people use a mortgage calculator to estimate the payment on a new mortgage, but it can be used for other purposes, too. Here are some alternative uses for calculator.
1. Planning to pay off your mortgage early.
By the time a 30-year fixed-rate mortgage is paid off, the typical mortgage holder will have made total interest payments significantly larger than the original principal on the loan.
To calculate the savings, enter a hypothetical amount into one of the payment categories (monthly, yearly or one-time) and then click “Show/Recalculate Amortization Table” to see how much interest you’ll end up paying and your new payoff date.
2. Decide if an ARM is worth the risk.
The lower initial interest rate of an adjustable-rate mortgage, or ARM, can be tempting. But while an ARM may be appropriate for some borrowers, others may find that the lower initial interest rate won’t cut their monthly payments as much as they think.
3. Find out when to get rid of private mortgage insurance.
Simply enter in the original amount of your mortgage and the date you closed, and click “Show/Recalculate Amortization Table”. Then, multiply your original mortgage amount by 0.8 and match the result to the closest number on the far-right column of the amortization table to find out when you’ll reach 20 percent equity.