If you live in a flood zone, you'll have an additional policy, and if you're in Hurricane Alley or earthquake country, you might have a third insurance policy.

Homeowners insurance: Your insurance policy can cover damage and financial losses from fire, storms, theft, a tree falling on your home and other hazards.

If you have an escrow account, you pay about one-twelfth of your annual tax bill with each monthly mortgage payment.

Property taxes: Local authorities assess an annual tax on your property.

Interest rates are expressed as an annual percentage.

Interest: This is what the lender charges you to lend you the money.

Principal: This is the amount you borrowed from the lender.Your lender also might collect an extra amount every month to put into escrow, money that the lender (or servicer) then typically pays directly to the local property tax collector and to your insurance carrier. The principal is the amount you borrowed, while the interest is the sum you pay the lender for borrowing it. The major part of your mortgage payment is the principal and the interest. Typical costs included in a mortgage payment You can edit these amounts or even ignore them as you're shopping for a loan - those costs might be rolled into your escrow payment, but they don't affect your principal and interest as you explore your options.

Bankrate's calculator also estimates property taxes, homeowners insurance and homeowners association fees. Your rate will vary depending on whether you’re buying or refinancing.Īs you enter these figures, a new amount for principal and interest will appear to the right. Our calculator defaults to the current average rate, but you can adjust the percentage. Next, you'll see “Length of loan.” Choose the term - usually 30 years, but maybe 20, 15 or 10 - and our calculator adjusts the repayment schedule.įinally, in the 'Interest rate' box, enter the rate you expect to pay. You can enter either a dollar amount or the percentage of the purchase price you're putting down. A down payment is the cash you pay upfront for a home, and home equity is the value of the home, minus what you owe. In the 'Down payment' section, type in the amount of your down payment (if you're buying) or the amount of equity you have (if you're refinancing). The calculus behind mortgage payments is complicated, but Bankrate's Mortgage Calculator makes this math problem quick and easy.įirst, next to the space labeled 'Home price,' enter the price (if you're buying) or the current value of your home (if you're refinancing).

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