Mortgage calculator

Mortgage options and terminology

A mortgage quote combines several choices: a loan program, a repayment term, an interest-rate structure, and upfront costs. Understanding each part helps you compare offers and enter more useful numbers in a calculator. A lower monthly payment can come from a longer term or a larger upfront payment, so consider the full cost as well as your monthly budget.

Common mortgage options

• Conventional loans are outside specific government insurance or guarantee programs. A conforming conventional loan meets applicable loan limits and purchase standards used by Fannie Mae or Freddie Mac. A jumbo loan exceeds the relevant conforming loan limit; limits vary by area and year. Conventional loans with a down payment below 20% commonly require private mortgage insurance.
• FHA loans are insured by the Federal Housing Administration. They offer low-down-payment options and may accommodate borrowers with lower credit scores, subject to lender and program requirements. FHA mortgage insurance differs from conventional PMI. Our FHA loan calculator models those insurance costs separately.
• VA loans are available to eligible veterans, service members, and certain surviving spouses. Qualifying purchase loans can require no down payment and do not require monthly mortgage insurance. A VA funding fee may apply unless the borrower qualifies for an exemption. Explore the VA loan calculator.
• USDA guaranteed loans can offer no-down-payment financing for eligible households buying a primary residence in an eligible rural area. Income, property, and repayment requirements apply. No down payment does not mean there are no closing costs or program fees.

Sources: CFPB loan options, conventional loans, VA purchase loans, and USDA guaranteed loans.

Fixed rates, adjustable rates, and loan terms

A fixed-rate mortgage keeps the same interest rate for the loan term. Its scheduled principal-and-interest payment stays constant, although taxes, insurance, and other housing costs can change. An adjustable-rate mortgage (ARM) typically starts with a fixed introductory rate and later adjusts under the loan's index, margin, and rate-cap rules. Review the possible payment after adjustment; refinancing before a reset is not guaranteed. This calculator uses a fixed rate and does not simulate ARM adjustments.

The loan term is the repayment period. For the same balance and rate, a 15-year term has a higher monthly payment and less total interest than a 30-year term. Actual offers may have different rates and fees. Use the 15- vs. 30-year calculator to compare both payment and lifetime interest. See the CFPB explanation of fixed and adjustable rates.

Principal, amortization, and escrow

Principal is the amount borrowed that remains to be repaid. Interest is the cost charged for borrowing. Amortization is the process of paying down the loan over time. On a standard fixed-rate amortizing loan, early payments usually contain more interest; as the balance falls, more of each scheduled payment goes toward principal.

An escrow account lets the servicer collect money for expenses such as property taxes and homeowners insurance, then pay those bills when due. Escrow is separate from principal and interest. An escrow adjustment can change your total monthly bill even when your rate is fixed. These terms are explained in the CFPB mortgage glossary.

Rates, fees, and the cash needed at closing

The interest rate is used to calculate borrowing interest. Annual percentage rate (APR) also reflects certain loan charges and is usually higher. Enter the interest rate in this calculator, rather than APR. Discount points are an upfront charge in exchange for a lower offered rate: one point costs 1% of the loan amount, but the rate reduction is not fixed. Lender credits can reduce upfront costs in exchange for a higher rate. See the CFPB guides to APR and interest and points and lender credits.

Your down payment pays part of the purchase price upfront. Closing costs cover separate charges, such as lender and settlement fees. Cash to close accounts for the down payment, closing costs, deposits already paid, and applicable credits or adjustments. The calculator's upfront-cash figure is a planning estimate; your lender's documents provide the transaction-specific amount.

LTV, DTI, and comparing offers

Loan-to-value (LTV) compares the loan amount with the property's appraised value. A $320,000 loan on a home appraised at $400,000 has an 80% LTV. Debt-to-income (DTI) divides monthly debt payments by gross monthly income. Lenders consider these measures alongside credit, assets, and program requirements; neither ratio alone determines approval. Read the CFPB definitions of LTV and DTI.

Compare written Loan Estimates using the same loan amount, term, and treatment of points. Review the rate, APR, projected payment, mortgage insurance, cash to close, and any prepayment penalty. Then enter the quoted figures above and compare the balance and interest at the time you expect to sell, refinance, or finish paying the loan. The CFPB Loan Estimate explainer shows where to find those figures.