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Our mortgage calculator makes it easy to see how home price, interest rate, and down payment affect your monthly mortgage payment.
Key Points
• A higher credit score and lower debt-to-income ratio improve mortgage approval chances.
• Conventional loans are made by private lenders and don’t have government backing or insurance.
• Assets can bolster loan qualification if income is lower.
• Strategies for early mortgage payoff include biweekly payments, refinancing, recasting, and lump-sum payments.
• Early mortgage payoff reduces monthly expenses and interest costs, beneficial before retirement.
How to Use the Mortgage Calculator
Welcome to the SoFi mortgage payment calculator. Whether you have found your dream home or are wondering what your purchase budget should be, this calculator will help you determine what your monthly home loan payment will be and how much interest you’ll pay over the life of your loan. Get helpful answers in mere minutes.
Step 1: Enter your home price.
Use the listed price of your desired home or your estimated purchase budget.
Step 2: Enter a down payment amount.
Enter a down payment of at least 3%. Putting 20% down on a property will allow you to avoid paying for private mortgage insurance (PMI), but many homebuyers put down less than 20%, especially if they qualify as first-time homebuyers.
If you think you will need to borrow more than $806,500 to purchase a home, you’re likely a candidate for a jumbo loan, and a lender may require you to put down at least 10%. (Some pricier areas have higher minimums for jumbo loans — enter the zip code of the location you’re shopping in at Fannie Mae’s mapping tool tool to see the jumbo loan number for your area.)
Step 3: Choose a loan term.
The term is the number of years the loan will last. The lower the term, the higher the monthly payment but the greater the savings in total interest paid.
Step 4: Enter an interest rate.
Plug in the day’s average fixed rate for a 15- or 30-year mortgage, or use the rate a lender has suggested you may qualify for.
Understanding the Results
The calculator will immediately show the following results:
• Loan amount This is the amount you would borrow, also known as the principal.
• Monthly mortgage payment This is what you would pay toward the principal and interest each month. Remember that you will also need to pay for property taxes, homeowners insurance, and perhaps homeowners association (HOA) fees, as well as PMI if your down payment was below 20%. These costs may be higher or lower than national averages depending on the cost of living in your area.
• Total interest paid This is the amount of interest paid over the life of the loan.
Benefits of Using a Mortgage Payment Calculator
Mortgages can be complicated, especially if you’re buying your first home, but there are many ways a mortgage payment calculator can help. Playing with different property values can give you a general idea of how a home’s price might impact your monthly payments and what a mortgage loan may cost in total over the life of the loan.
It’s also helpful to use a home mortgage calculator to compare the monthly payment for different types of mortgage loans (15- vs. 30-year terms). And it’s useful to see how sizing up (or trimming back) your down payment amount might affect your monthly costs. (If you think you might struggle to come up with any down payment at all, there are down payment assistance programs that can help.)
The only downside of using a mortgage calculator? As noted above, many mortgage calculators don’t include property taxes, homeowners insurance, mortgage insurance, or HOA fees — so they don’t provide a complete picture of the recurring expenses on a property. And of course the numbers you get from a mortgage calculator are only as solid as the numbers you put in: If you put in a low interest rate that you can’t qualify for because of steep debts or a shaky credit history, your actual results in the mortgage market will differ.
Formula for Calculating a Mortgage Payment
The mathematical formula for a home mortgage calculator is pretty complicated, which is why this calculator is so handy. If you wanted to do the math by hand, your formula would look like the one below. In this example:
M = Monthly mortgage payment
P = Principal (the amount you borrow)
R = Your interest rate. (Use the base rate, not the annual percentage rate, or APR.) Divide it by 12 because the rate is an annual one and you are solving for a monthly payment amount.
N = Number of payments in your loan term. A 15-year term, for example, would have 180 monthly payments.
M = P [R(1 + R)n] / [(1 + R)n − 1]2
Deciding How Much House You Can Afford
Using a mortgage calculator is one way to begin to get a handle on how much house you can afford. You can also use a home affordability calculator, which will take into account your annual income and debts to generate a maximum home price that would be within your budget.
There are also longstanding guidelines for homebuyers that can help you determine what you can afford. One is the 28/36 rule, which states that your total mortgage payment, including principal, interest, taxes, and insurance, should not exceed 28% of your gross income, and your mortgage payment plus any other debt payments should not exceed 36% of your gross income. To learn what your monthly limits would be under the 28/36 rule, simply multiply your monthly gross income by 0.28 and again by 0.36.
Additionally, before you settle on a location, do your homework on the cost of living and mortgage rates. It might just surprise you.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
How Lenders Decide How Much You Can Afford to Borrow
There’s another important calculation involved in the home-buying process: the number-crunching a prospective lender will do to determine the size of loan and terms you might qualify for. Each lender has its own formula, but in general a lender will be looking at your debt-to-income ratio, which is your total debt divided by your gross income, shown as a percentage. (Generally, lenders are looking for 43% or less.)
Lenders will also examine your credit history, your income history, your down payment amount, and other factors to arrive at whether you are a good candidate for a loan and, if so, what terms you’ll be offered.
What’s Next: Get Preapproved for a Mortgage Loan
Once you’ve used a mortgage calculator to estimate how much you might be able to pay for a house, you can get prequalified for a mortgage with a few lenders to obtain a clearer idea of what interest rate and loan amount a lender might offer you, based on a high-level look at your finances. As you get serious about home-shopping, you’ll want to take the next step and get preapproved for a mortgage with at least one lender.
Going through the mortgage preapproval process involves a thorough review of your credit and financial history. If you seem to be a good candidate for a home loan, the lender will give you a mortgage preapproval letter stating that you qualify for a loan of a certain amount and at a certain interest rate. The letter is an offer, but not a firm commitment. It’s typically good for up to 90 days. If you’re competing with other buyers in a hot market, being preapproved for financing will make you more attractive to sellers.
Principal and interest are the foundation of a mortgage payment, and the amount of your monthly payment that goes to each of these expenses changes over the life of the loan, with more of the payment being applied to interest costs early in the life of the loan. As you make payments over the years, more money will gradually go toward paying down the principal.
Typical Costs Included in a Mortgage Payment
Principal and interest aren’t the whole story. Maybe you’ve heard of PITI, which stands for principal, interest, taxes, and insurance. Property taxes and homeowners insurance costs can often be rolled into mortgage payments. The money is held in an escrow account, and payments are then made by your mortgage servicer. You can decide whether taxes and insurance become part of your monthly mortgage payment when you choose your home mortgage loan.
Tips on Reducing Your Mortgage Payment
After you’ve had your home loan for a while, you might be interested in lowering your mortgage payments. One way is to apply any bonus or windfall to the principal and request that your lender “recast” your loan so that monthly payments are based on the smaller principal. Another option might be to refinance to a lower interest rate. Maybe rates have dropped or your credit score has improved significantly since you bought your home — in this case, a refinance might offer real savings. You can put a lower interest rate into a mortgage refinance calculator to see how a refinance would affect your monthly payments and interest paid over the life of a new loan.
Another way to reduce your monthly payment: If your equity in the home has hit 20% of its original value (the value when you purchased it), you can write to request that your lender cancel PMI. As long as the property has held its value, you have kept current on your monthly payments, and there are no liens or additional mortgages on the home, your request should be granted.
The Takeaway
A mortgage payment calculator can give you an idea of what your monthly mortgage payments would look like based on how much you spend on a house, what size down payment you make, and what interest rate you obtain. Getting prequalified for a home loan with one or more lenders will give you an even clearer idea. And obtaining a mortgage preapproval will tell you exactly how much you may qualify to borrow from a lender and what your monthly payments might be.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
A borrower makes monthly payments, typically composed of principal, interest, taxes, insurance, and any private mortgage insurance required by the lender. With a fixed-rate mortgage, monthly payments stay the same, but the amount of each payment that is put toward principal vs. interest is divvied up differently over time. A mortgage loan calculator can show how much monthly payments would be based on different loan types and interest rates.
How does my credit score affect my mortgage loan interest rate?
Borrowers with the highest credit scores get the lowest interest rates. Even a small increase in rate can make a big difference over the life of a loan.
What is principal and interest on a mortgage loan?
The principal is the amount borrowed. The interest is the price paid for borrowing.
How much should I put down on a mortgage?
Twenty percent down on a conventional loan is ideal, but most people are not able to come up with that much. Some conventional and government-backed loans allow for low down payments or none at all. Currently, the median down payment for a house is 15%, according to data from the National Association of Realtors®. And first-time buyers often put down even less.
Should I choose a 30-year or 15-year mortgage term?
If you can comfortably swing the payments on a 15-year mortgage and you have emergency and retirement savings, the shorter loan term could be a smart choice because the total savings in interest will be substantial.
How can I get a lower mortgage interest rate?
Many house hunters ask for loan estimates from several lenders to find the lowest possible rate. Be sure to examine the details and compare the annual percentage rates, which take fees into account. There may be room to negotiate with a chosen lender, but you’re in the best position if you have a strong credit score and low debts, so focus on improving those metrics before applying for a loan. FHA, VA, and USDA loans may have lower rates than conventional loans (but they require either mortgage insurance or fees).
How much income do you need for a $400,000 mortgage?
It would take an annual income of about $130,000 to afford a $400,000 mortgage. If you have significant debts, you might need to earn more.
Can I afford a $300K house on a $70K salary?
One rule of thumb is that your home’s cost should not be more than three times your annual income. So it would be difficult to cover the costs of a $300,000 house on a $70,000 salary — unless you are able to contribute a large down payment. Use a home affordability calculator to zero in on your personal budget number.
What is a livable hourly wage?
Depending on where you live in the United States, a living wage ranges from about $23 per hour to around $44 per hour (before taxes) for a household of two working adults and two kids, according to the Massachusetts Institute of Technology Living Wage Calculator. Your personal number will depend on costs in your local area and your family size.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
