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If you’re looking to buy a home in Memphis, a mortgage calculator can be an indispensable tool. It helps you estimate monthly payments, total interest, and the overall cost of the mortgage, providing a clear picture of the financial commitment involved. By inputting the home price, down payment, loan term, and interest rate, you can explore different scenarios and make informed decisions.
Whether you’re a first-time homebuyer or a seasoned property owner, understanding the financial implications of your mortgage is crucial for long-term financial health. Here’s how to use the calculator to your advantage during your Memphis home search.
Key Points
• Input home price, down payment, loan term, interest rate, and property tax for accurate mortgage calculations.
• Use the calculator to estimate monthly payments, total interest, and overall loan costs.
• Compare different loan scenarios to find the best option.
• Larger down payments and lower rates can reduce borrowing costs and monthly payments.
• Memphis homebuyers can explore down payment assistance programs to lower upfront costs.
Memphis Mortgage Calculator
Calculator Definitions
Before diving in, it’s helpful to understand the terms you will encounter when using a mortgage calculator:
• Home price: This is the listing or purchase price of the property you’re interested in. It serves as the foundation for all other calculations. A higher home price means a higher home loan amount, unless it’s offset by a larger down payment.
• Down payment: The down payment represents the initial sum the homebuyer provides up front in cash. Buyers typically put down between 3% and 20% of the home’s purchase price. To avoid paying private mortgage insurance (PMI), you’ll need to put down at least 20%. If you get a jumbo loan, you’ll need to put down at least 10%.
• Loan term: The loan term is the length of time you have to repay the home loan. A 15-year mortgage term can help you pay off your loan faster and save on interest, but it comes with higher monthly payments. Conversely, a 30-year mortgage term offers lower monthly payments but results in more interest paid over the life of the loan. Choose the term that best fits your financial goals and budget.
• Interest rate: The interest rate is the cost of borrowing money, expressed as a percentage of the home loan amount. Interest rates can vary based on your credit score, market conditions, and the type of mortgage loan you choose. A lower rate can significantly reduce your monthly payments and the total interest paid over the life of the loan.
• Annual property tax: Annual property tax is based on state and county tax levies. This cost is often divided into 12 equal monthly payments and included in your regular mortgage payment. Accurately estimating this cost beforehand can help you budget more effectively and avoid financial surprises down the road.
• Total monthly payment: The total monthly payment includes the principal loan amount, the accrued interest, and the annual property tax divided into monthly installments. Knowing this number can help you determine the affordability of a particular property in Memphis.
• Total interest paid: The total interest paid represents the aggregate amount of interest you will pay over the entire life of the home loan. This figure can vary widely depending on factors such as the loan term, the interest rate applied, and the size of your down payment.
• Total loan cost: The total loan cost is the all-in amount you will pay for the home loan, including both the principal and the interest. This figure provides a complete picture of your financial commitment and can help you compare different mortgage scenarios.
How to Use the Memphis Mortgage Calculator
Using a mortgage calculator for Memphis, Tennessee, is straightforward. Here are the steps involved:
Step 1: Enter Your Home Price
Start by typing in the asking or agreed-upon price for the Memphis home you plan to buy. Even if you’re not sure of the exact home you want to purchase, you can enter different price points to see how they affect your payment.
Step 2: Select a Down Payment Amount
Input the amount of money you plan to contribute up front as a dollar figure. The down payment directly reduces the amount you need to borrow and, in turn, your monthly payment. A down payment calculator can help you decide on the right number.
Step 3: Choose a Loan Term
Select how long you’d like to have to repay your loan. The most common mortgage terms are 15 and 30 years. Shorter terms often come with lower interest rates but result in higher monthly payments.
Step 4: Enter an Interest Rate
Enter the annual interest rate you expect to qualify for, including two or three decimal points. A lower interest rate can significantly reduce your monthly payments and total loan cost.
Step 5: Input Your Annual Property Tax
Enter the annual property tax rate percentage for the area. You can find this by using an online property tax calculator or searching for the home’s ZIP code and “effective property tax rate.”
Benefits of Using a Mortgage Payment Calculator
A mortgage calculator is a powerful tool for prospective homebuyers, since it can help you assess how much house you can afford even before you start house hunting. It estimates your monthly payments based on factors like loan amount, interest rate, and loan term. By comparing different scenarios, you can understand how varying interest rates and loan terms impact your payments. You can also adjust your down payment amount and immediately see how larger upfront contributions reduce both your monthly payment and total loan cost.
The Memphis mortgage calculator also allows you to factor in annual property taxes. This ensures you aren’t caught off guard when this cost is added to your monthly payment, and can be especially helpful for first-time homebuyers.
Deciding How Much House You Can Afford in Memphis
The median sale price of a home in Memphis was $184,000 in late 2025, according to Redfin. Using the mortgage calculator, and assuming a 20% down payment ($36,800) and an interest rate of 6.50% on a 30-year loan, your monthly payment would be $940 including property tax (estimated at 1.12%).
A common rule of thumb is to keep your housing costs below 28% of your gross monthly income. To be able to afford a $940 monthly payment and still stay below that threshold, you would need annual earnings of around $40,290. If you prefer to work backward from your income to decide how much home you can afford in Memphis, consider using a home affordability calculator.
Another way to determine affordability is to go through the mortgage preapproval process with a lender, which involves providing detailed financial information. The lender can let you know whether or not you qualify for a loan and, if so, in what amount and under what terms.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
Components of a Mortgage Payment
The main components of a mortgage payment are principal and interest. The principal is the portion of the payment that goes toward paying down the loan balance, while the interest is the cost of borrowing the money. Your monthly payment may also include property tax, which varies by location. Other components might include PMI or homeowners association (HOA) fees, depending on your specific loan and property.
If you’re considering a home loan guaranteed by the Federal Housing Administration (FHA), you may want to use a FHA mortgage calculator, which takes into consideration both the loan’s upfront and ongoing mortgage insurance premiums. If you’re looking at a loan backed by the U.S. Department of Veterans Affairs, consider using a VA mortgage calculator.
The Cost of Living in Memphis
The general cost of living is a key factor when buying a house, because it directly impacts your overall financial situation and ability to afford monthly expenses beyond just the mortgage payment, such as groceries, transportation, and health care.
The cost of living in Memphis is below the national average. The city has a cost of living index of 89.8 (the average cost of living in the U.S. is 100 on this scale). The chart below shows how costs break down across different categories. According to MIT’s Living Wage Institute, two working adults (working full-time) with two children would need to each earn at least $23.84 an hour to support themselves in Memphis.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
If you’re thinking about buying your first home in Memphis, you can explore Tennessee first-time home-buying assistance programs to help cover the initial costs associated with homeownership. Anyone who hasn’t owned a primary home in the past three years is considered a first-time homebuyer. These programs can provide significant financial aid specifically intended for the down payment, closing costs, or both, which can make homeownership much more accessible and affordable.
Many down payment assistance programs are run on the state level, but the city of Memphis also runs their own assistance programs, so it’s a good idea to also explore your local options.
Even after you close on a home in Memphis, there may be ways to lower your monthly mortgage payments. Here are some strategies to consider:
• Drop PMI: If your original down payment was less than 20%, you may be paying PMI. Once you’ve built up 80% equity in your home, you can request to have PMI removed. Getting rid of this charge can cut a significant amount from your monthly payment.
• Consider a mortgage recast: With mortgage recasting, you make a larger lump sum payment toward your principal balance. Your lender then recalculates your monthly payment based on the lower balance, while keeping your existing loan terms and interest rate the same. This can be a smart option if you come into extra funds, such as a bonus, tax refund, or inheritance.
• Appeal your property taxes: If you believe your assessment is too high compared to similar properties, you can appeal the assessment with your county auditor’s office. A successful appeal could lower your property tax bill and, in turn, reduce your monthly payment.
• Look into loan modification: If you’re struggling to make payments, your lender may be willing to adjust your loan terms through a modification. This could involve extending your repayment period, reducing your interest rate, or restructuring your loan in another way to bring down your monthly obligation.
• Shop for a lower rate: If mortgage rates have fallen or your credit has significantly improved since you originally financed your home, it can be worth looking into a home refinance. This could potentially reduce your monthly payments and save you thousands over the life of the loan.
The Takeaway
Buying a home in Memphis doesn’t have to feel overwhelming when you have the right resources in place. A mortgage calculator provides a way to see how home price, down payment, loan term, interest rate, and property tax all fit together to shape your budget. It also allows you to explore different options, compare how small changes affect your payments, and better understand the true long-term cost of your loan. With clear numbers in front of you, you can move forward confidently, knowing your dream home is not only within reach but also financially sustainable.
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.
The median monthly mortgage payment in Memphis in the second quarter of 2025 was $1,659, according to the National Association of Realtors®. But as a mortgage calculator shows, an average payment can fluctuate based on several factors, including the price of the home, the prevailing interest rate, and the term length of the loan.
How does my credit score affect my mortgage loan interest rate?
Lenders use your credit score to judge how much risk you pose as a borrower. A strong credit score often qualifies you for lower interest rates, meaning you’ll pay less over the life of your mortgage. A weaker score, however, may lead to higher rates and more expensive monthly payments. Since even a small percentage difference can add up to thousands of dollars, working to build your credit profile before applying can make a big impact on your long-term costs.
What are principal and interest on a mortgage loan?
When you make a mortgage payment, it’s typically divided into principal and interest. The principal is the actual loan balance — the amount you borrowed and still owe. Interest is the fee charged by the lender for allowing you to borrow that money, calculated as a percentage of your remaining balance. Early in the loan, most of your payment goes towards interest, but over time, more is applied to principal. This steadily reduces your debt and helps you build home equity.
How much should I put down on a mortgage?
There’s no one-size-fits-all answer to the ideal down payment. A 20% down payment is often recommended because it helps you avoid private mortgage insurance (PMI) and can reduce your monthly costs. However, many lenders offer programs that allow smaller down payments, sometimes as little as 3% to 5%. While putting less down gets you into a home sooner, it typically increases your payments and total interest. Larger down payments lower your loan amount and can save you money overall.
How can I get a lower interest rate?
Lowering your mortgage rate usually requires planning and making smart choices. Strengthening your credit score by paying on time and reducing debt can make you a more attractive borrower. Contributing a large down payment also lowers lender risk, which may qualify you for better terms. Other ways to get a lower interest rate include shopping around (since different lenders may offer different rates), choosing a shorter loan term, or opting for an adjustable-rate mortgage (ARM).
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*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.
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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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.
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