Mortgage Calculator

Mortgage Data

Appraised value

Price of the property. Basically, this is the house purchase price, but technically appraisal value is the market value of an asset that is derived from the appraisal process. Depending on the asset, the method used to appraise the asset will differ. For homes, appraisers often use a method that includes recent sales data of comparable homes. They may also use the replacement method, which is the cost to replace the home at today's prices.

Loan amount

This amount is how much you borrow from the bank. For example, if you are buying $100,000 house and put 20% down ($20,000), loan amount is $80,000.

Term

The period of a loan, generally measured in years. The vast majority of US Banks provide 30 and 15 years mortgages, but you can enter any number.

Closing date

This is a starting date of the loan when you close the deal. Interest starts accumulating from that date.

Interest rate

Interest rate is the cost of borrowing money as a yearly percentage. For investors, interest rate is the rate earned on an investment as a yearly percentage. The simple interest rate is interest paid or received divided by loan or deposit. For example, $100 in annual interest on a $1,000 loan or deposit is a simple interest rate of 10%. Compounded interest rate is determined by the frequency of interest payments during the loan or deposit term. For example, a 10% loan or deposit that is compounded quarterly equals a compounded rate of 10.38%. If compounded daily, the compounded interest rate increases to 10.52%. (For CD investors, compounded interest rate is called annual percentage yield.) Effective interest rate, or annual percentage rate (APR), is the true interest cost of borrowing. It includes fees and points you pay for a loan in the calculation. As a result, effective interest rate is higher than simple interest rate.

Yearly property tax

Property taxes are also called real estate taxes. These taxes are paid to the local taxing authority or municipality. The amount you pay can generally be deducted from your federal income taxes. Property taxes are often levied as a percentage of your home's assessed value. For example, if you pay 0.5% in property taxes of the assessed value, a home assessed at $250,000 would have a yearly property tax bill of $1,250.

Yearly property insurance

Also called homeowner's insurance, property insurance protects the homeowner from weather-related damage, as well as potential liability from events that occur on the property. Lenders require homeowner's insurance coverage to protect the collateral that secures their loan. Some homeowner's insurance policies do not cover catastrophic events such as tornadoes, hurricanes or floods. These kinds of events generally require a separate insurance policy.

Results

Payment

The computed mortgage payment. This is the minimum payment required by the lender. You can always pay more to decrease amount of the pricipal.

Total Interest

Total amount of interest paid over the years of the loan.

Total PMI

PMI stands for Private Mortage Insurance. This insurance is usually required by the lenders if you are buying a house without paying 20% of property price down. PMI can be (and must be) cancelled when you owe less than 80% of the current property value.

Total months

Total months or total number of monthly payments required to pay off the mortgage.