2023 RATES 2022 RATES
As you set your housing budget, determining your monthly house payment is crucial — it will probably be your largest recurring expense. As you shop for a purchase loan or a refinance, FCF’s Mortgage Calculator allows you to estimate your mortgage payment. For various scenarios, just change the details you enter in the calculator.
The calculator can help you decide:
- The loan length that’s right for you. If your budget is fixed, a 30-year fixed-rate mortgage is probably the right call. These loans come with lower monthly payments, although you’ll pay more interest during the loan. If you have some room in your budget, a 15-year fixed-rate mortgage reduces the total interest you’ll pay, but your monthly payment will be higher.
- If an ARM is a good option. As rates rise, it might be tempting to choose an adjustable-rate mortgage (ARM). Initial rates for ARMs are typically lower than those for their conventional counterparts. A 5/6 ARM — which carries a fixed rate for five years, then adjusts every six months — might be the right choice if you plan to stay in your home for just a few years. However, pay close attention to how much your monthly mortgage payment can change when the introductory rate expires.
- If you’re spending more than you can afford. The Mortgage Calculator provides an overview of how much you can expect to pay each month, including taxes and insurance.
- How much to put down. While 20% is thought of as the standard down payment, it’s not required. Many borrowers put down as little as 3%.
How to lower your monthly mortgage payment
If the monthly payment you’re seeing in our calculator looks a bit out of reach, you can try some tactics to reduce the hit. Play with a few of these variables:
- Choose a longer loan. With a longer term, your payment will be lower (but you’ll pay more interest over the life of the loan).
- Spend less on the home. Borrowing less translates to a smaller monthly mortgage payment.
- Avoid PMI. A down payment of 20 percent or more (or in the case of a refi, equity of 20 percent or more) gets you off the hook for private mortgage insurance (PMI).
- Shop for a lower interest rate. Be aware, though, that some super-low rates require you to pay points, an upfront cost.
- Make a bigger down payment. This is another way to reduce the size of the loan.