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Home Loan Calculator

Home Loan Calculator

Section titled “Home Loan Calculator”

Calculate home loan payments, total interest, and amortization schedules to plan your home purchase or refinancing with complete financial clarity.

%
yrs
mo

Use Cases

Section titled “Use Cases”

This home loan calculator is essential for first-time homebuyers planning purchases, current homeowners exploring refinancing options, real estate investors analyzing properties, and financial planners advising clients on home financing.

What is a Home Loan?

Section titled “What is a Home Loan?”

A home loan (or mortgage) is a long-term loan secured by real estate property. The borrower repays the principal plus interest over a fixed term, typically 15-30 years, with the property as collateral.

Home Loan Payment Formula

Section titled “Home Loan Payment Formula”

Monthly payment calculation for a fixed-rate home loan:

P=r⋅PV1−(1+r)−nP = \frac{r \cdot PV}{1 - (1 + r)^{-n}}

Where:

  • PP = Monthly payment amount
  • PVPV = Loan principal (home price minus down payment)
  • rr = Monthly interest rate (annual rate ÷ 12)
  • nn = Total number of monthly payments

Total Interest Paid:

Total Interest=(P×n)−PV\text{Total Interest} = (P \times n) - PV

Math.js Expression:

home_price = 450000;
down_payment_percent = 0.20;
down_payment = home_price * down_payment_percent;
loan_amount = home_price - down_payment;
annual_rate = 0.06;
monthly_rate = annual_rate / 12;
loan_term_years = 30;
num_payments = loan_term_years * 12;


monthly_payment = (monthly_rate * loan_amount) / (1 - (1 + monthly_rate)^-num_payments);
total_paid = monthly_payment * num_payments;
total_interest = total_paid - loan_amount;


monthly_payment

Example Calculation

Section titled “Example Calculation”

Home Purchase Scenario:

  • Home Price: $450,000
  • Down Payment: 20% ($90,000)
  • Loan Amount: $360,000
  • Interest Rate: 6% APR
  • Loan Term: 30 years

Step 1: Calculate Monthly Rate

annual_rate = 0.06;
monthly_rate = annual_rate / 12;
monthly_rate  // 0.005

Step 2: Calculate Number of Payments

loan_term_years = 30;
num_payments = loan_term_years * 12;
num_payments  // 360

Step 3: Calculate Monthly Payment

loan_amount = 360000;
monthly_rate = 0.005;
num_payments = 360;


monthly_payment = (monthly_rate * loan_amount) / (1 - (1 + monthly_rate)^-num_payments);
monthly_payment  // $2,158.57

Step 4: Calculate Total Interest

total_interest = (monthly_payment * num_payments) - loan_amount;
total_interest  // $417,083

Examples

Section titled “Examples”
  • 300,000homeloanat6300,000 home loan at 6% for 30 years = 1,799/month (total interest: $347,515)
  • 450,000homeloanat6.5450,000 home loan at 6.5% for 30 years = 2,844/month (total interest: $574,095)
  • 600,000homeloanat5.5600,000 home loan at 5.5% for 15 years = 4,904/month (total interest: $282,767)
  • 250,000homeloanat7250,000 home loan at 7% for 30 years = 1,663/month (total interest: $348,772)

Common Mistakes & Tips

Section titled “Common Mistakes & Tips”

Underestimating Total Cost: A 300,000loanat6300,000 loan at 6% over 30 years costs nearly 650,000 total. Always calculate total interest to understand true cost.

Not Shopping for Rates: A 0.25% rate difference on a 400,000mortgagesavesapproximately400,000 mortgage saves approximately 20,000 over 30 years. Compare at least 3-5 lenders.

Skipping the 20% Down Payment: Less than 20% down requires PMI (private mortgage insurance), adding $100-300+ monthly until you reach 20% equity.

Ignoring Closing Costs: Budget 2-5% of home price for closing costs including appraisal, title insurance, origination fees, and escrow.

Overlooking Property Taxes and Insurance: These can add 30-50% to your monthly housing cost. Research actual tax rates in your target area.

Frequently Asked Questions

Section titled “Frequently Asked Questions”

How much do I need for a down payment?

Section titled “How much do I need for a down payment?”

While some programs allow 3-5% down, 20% is ideal to avoid PMI and secure better rates. For a 400,000home,that′s400,000 home, that's 80,000 down.

What credit score do I need for a home loan?

Section titled “What credit score do I need for a home loan?”

Conventional loans typically require 620+, FHA loans accept 580+, but higher scores (740+) qualify for the best rates. Check your score before applying.

Should I get a 15-year or 30-year mortgage?

Section titled “Should I get a 15-year or 30-year mortgage?”

15-year mortgages have higher monthly payments but save enormously on interest and build equity faster. 30-year loans offer lower payments with more flexibility.

Can I pay off my home loan early?

Section titled “Can I pay off my home loan early?”

Most mortgages allow early payoff without penalties. Extra principal payments significantly reduce total interest and shorten the loan term.

What is the difference between pre-qualification and pre-approval?

Section titled “What is the difference between pre-qualification and pre-approval?”

Pre-qualification is an estimate based on self-reported information. Pre-approval involves credit checks and documentation verification, making your offer stronger to sellers.

How does my interest rate affect my payment?

Section titled “How does my interest rate affect my payment?”

Each 0.5% rate increase on a 400,000loanaddsapproximately400,000 loan adds approximately 120/month to your payment. On a 30-year term, that’s $43,000+ in additional cost.

Section titled “Related Calculators”