How to Calculate if You Can Afford Your Mortgage Payments?

When you’re figuring out how mortgage loans work, you need all the help you can get. Fortunately, there are a lot of tools available that can help, including a mortgage calculator. Learn more about how to use a mortgage calculator to determine your monthly payment.

What Is a Mortgage Calculator?

Mortgage calculators help you determine the financial impact of changes to different variables of the mortgage loan. Consumers use them to estimate their monthly payments. Mortgage providers use them to evaluate the financial suitability of the applicant.

Mortgage calculators are very handy if you’re comparing homes with different home values. You can also use them to estimate the down payment needed to secure a monthly payment that fits in your budget. Experiment with a calculator to see how changes in home price, interest rate, down payment and loan term impact your payments.

Understanding the Terminology

Before using the calculator, refresh your knowledge of mortgage-related terminology:

  • Home Price-The amount of your accepted offer for a home, which may be different than what the property was listed at.
  • Down Payment-The amount of money you have available to put down on your home. The minimum on most conventional loans is 3%. Many homeowners strive to save 20% to get a better rate.
  • Interest Rate-This is a percentage of the loan amount that you pay annually throughout the loan term.
  • PMI loan term-Private Mortgage Insurance is required on conventional loans when the borrower’s down payment is less than 20%.

When Should You Use a Mortgage Calculator?

you should always use a tool to figure out your payments before you speak with a mortgage lender, so you have an amount in mind

Where Can You Find a Good Mortgage Calculator?

Use this easy-to-understand USDA mortgage calculator to get a quote on your mortgage rate and payments.

How Do You Use a Mortgage Calculator?

Use a mortgage calculator to facilitate your home buying research. It’s the easiest way to find out what interest rates you can expect.

Change your credit score, home price, loan type, and geographical area to find out how improving your credit rating and location impact the monthly payment and interest rates. Knowing your options helps you find a home in your price range and a mortgage with the best possible rates.

Consider All Your Options

Make sure you apply for a loan that works for you and your family. Your mortgage lender can help you decide what steps to take to improve your chances of getting approved.  Once you’ve chosen a loan type, compare home prices to get an idea of what your payment might be, including principal and interest rates.


There may be room to negotiate with a lender, which puts you in a position to bargain. For example, your lender may be willing to match offers you get from other lenders.

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