A mortgage calculator is an online tool that helps you work out your calculations before buying a house and also keep tabs on your monthly mortgage payments. Many variables are involved in a mortgage calculation, including the length of the loan, number of payments, interest rate, etc. Based on this, you can work out how your monthly loan payout can differ.

Also referred to as house payment calculators, mortgage loan calculators are tools that help you perform the most complex amortization calculations in a short period of time.

These calculators, however, have certain limitations. Though they provide you with a rough estimate of your monthly payments, they aren’t 100 percent accurate. This is because they don’t include all the possible costs involved in buying a home, nor do they factor in other costs such as taxes, management fees, and maintenance. A mortgage loan calculator can certainly be a good tool to determine and calculate the approximate costs before you decide to buy a property, provided you are well aware of its limitations.

When should you use a mortgage loan calculator?

We all know that our homes are one of the biggest investments that we make in our lifetimes. And a home mortgage loan calculator could be a perfect tool that you can use before you go house-hunting. With this calculator, it will be easier for you to determine a payment range, depending on your monthly earnings, when you lay down a budget for your house. Moreover, these calculators will also give you an idea about the income that you need to qualify for a home loan. Based on these figures, you can determine the affordability and feasibility of any particular house. Being aware of your monthly household budget that you can set aside realistically to afford a house is a rather responsible move, and a mortgage calculator can help aid this process to quite an extent.

What information should you know?

In order to use the mortgage loan calculator correctly, you need to accurately fill in the fields that are requested by it. For this, you should know a bunch of things related to your payment. These include:

• Rate of interest
• Purchase price of the home that you are interested in buying
• Term of the loan
• Initial down payment that you can bear (this can be from savings that you may have set aside for the loan)

After you have provided all of these details, the calculator will give you an estimate of your monthly dues, which would be a sum of your interest rate and principal amounts. However, this means that your mortgage calculator amount is only accurate up to a certain limit, as it will offer an estimate of only the amount that you specify. Thus, you need to perform adequate research well in advance to calculate the exact costs that you will bear, including the present rate of interest. Moreover, when it comes to setting aside an amount for the loan’s down payment, you need to be extremely diligent in your calculations.

Costs a mortgage loan calculator may not include

A mortgage loan calculator is an incredibly useful tool that plays an essential role in breaking down your amortization costs, thereby helping you in deciding whether you can afford a particular house. However, in most cases, it only calculates the principal amount and the interest and tends to leave out additional expenses that form an important part of your overall monthly budget. Some of these expenses include:

• Property taxes
• Home insurance
• Costs of utilities such as phone, water, gas, electricity, and the Internet, and even community fees for expenses dedicated to a common area, such as landscaping, maintenance, and security
• Private Mortgage Insurance (PMI), which needs to be paid if you pay a down payment that is lower than 20 percent
• Other maintenance expenses to ensure that the house stays in decent shape

You can view the amount that you are shown on the mortgage loan calculator as the base amount. To this amount, you will have to add the expenses listed above. In order to do so, it is imperative to do some research and work out your estimates to arrive at your approximate monthly fee. A calculation of this sort can leave you with a much better analysis of the monthly income that you are required to set aside for your dream home.

In addition to this, there are a few upfront costs that you need to consider. Firstly, you’ll have to pay approximately 10%–20% of the amount as down payment. In addition to this, you will have to pay an amount equivalent to 2%–5% as a closing fee. Apart from these, there are many more upfront costs, which, if factored in, can help you be absolutely sure about the affordability of your home. They are listed below:

• Origination fee

Origination fee is the amount that is to be paid for a fresh loan application. The origination fee will be approximately one percent of the total payment amount.

• Lender credits

A lender credit is money that you receive from your lender to cover your closing costs. Lender credits may reduce the closing cost but they add to the interest. On the other hand, these credits bring down your rate of interest when you pay a certain amount of upfront fee.

• Appraisal fee

To know the current market value of the home, you will be required to pay a sum to the appraisal company. This amount is known as the appraisal fee.

• Attorney fee

There is a certain amount that you are required to to pay the attorney who will handle the entire legal process. This amount is usually paid during the closing.

• Closing escrow fee

Money that has to be paid to the escrow company to handle the closing of the transaction is known as the closing escrow fee.

• Recording fee

Lastly, a recording fee is the amount that is charged by a government body for recording the sale of and change in ownership of the property.

Important features that you should look for in a mortgage loan calculator

The main reason behind using a mortgage loan calculator is to avail of a data-driven and realistic estimate of all that you are supposed to pay towards your home mortgage loan. However, before you select a mortgage loan calculator, you need to check a set of key features. A good mortgage loan calculator should help you with the following tasks:

• Gives you an idea of your monthly payment

Your chosen mortgage loan calculator should allow you to calculate the monthly amount that you’ll have to pay towards the loan.

• Gives you an estimate of the minimum required income

The mortgage loan calculator should give you an estimate of the minimum income that you’ll need to buy the home.

• Gives an idea of the property’s affordability

Every good home loan calculator will give you an estimate of the maximum value of the home that you are able to afford.

• Gives you distinct repayment scenarios

An ideal mortgage loan calculator will also provide you with several repayment scenarios for your home mortgage.

• Gives you an idea of your payoff goal

Any good mortgage loan calculator will not only give you a goal for the loan payoff but will also help in the estimation of the impact that accelerated payments will have.

• Helps calculate the home refinancing loan

Your chosen mortgage calculator should be able to help you calculate the amount of the home refinancing loan.

• Lets you include additional expenses

To estimate your monthly payments, the mortgage loan calculator should allow you to include additional expenses, such as the closing cost, taxes, etc., to determine the monthly home payment amount in a more accurate manner.

Some of the best mortgage loan calculators  

That said, which mortgage loan calculator should you trust? We have come up with a list of six of the most effective, user-friendly, and reliable mortgage loan calculators that you can use. These include:

• Home loan calculator by Zillow.com

Clearly at the top of the list is the mortgage loan calculator   by Zillow.com. If you have used it, then you know why we say so. With this calculator, you get a vast array of options when it comes to calculating your mortgage payment. This includes estimating the mortgage amount along with the expense of insurance and taxes. It is simple to use—all you have to do is enter details such as the down payment, cost of your home, interest rate, along with other calculations relating to the home loan. All of this information is used for the calculation of the mortgage payment schedule. With this mortgage loan calculator, you can also get yourself pre-qualified to have an even more accurate estimate of your payment.

• Mortgage calculator by DaveRamsey.com

The mortgage loan calculator offered by DaveRamsey.com is incredibly easy to use. It helps the buyer to calculate the total home value, as well as monthly payouts towards the home mortgage. All of this can be done within a few minutes. For this, all you have to do is feed in details such as the down payment amount, the total value of the home, interest rate, and the type of loan, among others. One interesting feature of this platform is that it can help you to locate a reliable real estate agent after your cost estimates are done.

• Mortgage calculator by US Mortgage

This calculator does not only help you calculate the approximate cost of the home but also take into account extra expenses such as property taxes, insurance costs, as well as the homeowners association (HOA) fees, and more.

• Mortgage payment calculator by FHA

The mortgage loan calculator by the Federal Housing Administration (FHA) usually gives an accurate payment estimate for FHA mortgage loans. It takes into account upfront costs like home insurance, monthly FHA insurance for the mortgage, and property taxes. With this calculator, you can also get an estimate of the minimum down payment that you will pay. This will help you assess its impact on the aggregate cost of the loan and the monthly payment that is made towards it. Additionally, you can access a link to check if you qualify for a home mortgage loan by FHA.

• Mortgage calculator by the United States Department of Veteran Affairs

This mortgage loan calculator has been designed exclusively for former and current members of the country’s military force. It helps in calculating the cost of the home loan with ease. It helps estimate the monthly payment towards the loan taken with or without a down payment. Furthermore, it gives a thorough estimate of loan fees, taxes, home insurance, and more. The platform also provides a link that helps determine whether one qualifies for a VA mortgage loan.

• Home loan calculator by Trulia

With Trulia, you get a hands-on, simple-to-use calculator that factors in essentials such as interest rates, total cost of the loan, property taxes, insurance costs, HOA costs, and many more details.   

Now that you have a basic idea about the features that you need to look for in a mortgage loan calculator and tools that are available online, start calculating the estimated costs of your dream home right away!