Mortgage Comparison Calculator
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Deciding which mortgage term works best for you is not always easy. Different interest rates and loan values as well as other factors such as your property tax rate can greatly affect how much you pay over the life of your home loan.
That’s why we recommend using Liberty Lending Consultants’ mortgage comparison calculator, a powerful tool that helps you compare different mortgage offers and determine which one is the best fit for your unique financial situation.
Whether you’re a first-time homebuyer or looking to refinance, our calculator makes it easy to understand the costs associated with different mortgage options.
How to use our Mortgage Comparison Calculator
- Enter the purchase price of the home you’re interested in buying.
- Enter the amount of your down payment. This is the amount of money you plan to put down upfront to purchase the home.
- Select the mortgage term you’re considering. Common terms include 15-year and 30-year mortgages.
- Enter the annual interest rate on your mortgage.
- Enter the amount you’ll pay in property taxes each year.
- Enter the amount you’ll pay in homeowners insurance each year.
- If applicable, enter the cost of your private mortgage insurance (PMI) each year.
- Select the date of your first mortgage payment.
- Click “calculate” to see a breakdown of your monthly payments, total payments, and your interest payment over the life of the loan.
That’s it! Our mortgage comparison calculator will provide you with a clear understanding of the costs associated with different mortgage offers. Use the calculated values to make an informed decision about which one is the best fit for your budget and financial goals.
Mortgage Calculator Inputs
Purchase Price: This is the total price of the home you’re looking to purchase.
Down Payment: This is the amount of money you plan to put down upfront to purchase the home. The higher your down payment, the lower your monthly payments will be.
Mortgage Term: Also known as loan term. This is the length of time you’ll be making payments on your mortgage. Common terms include 15-year and 30-year mortgages.
Interest Rate: This is the annual interest rate on your mortgage. The higher the interest rate, the more you’ll pay in interest over the life of the loan. You’ll also likely have a higher monthly payment.
Property Tax: This is the amount of money you’ll pay each year in property taxes.
Property Insurance: This is the amount of money you’ll pay each year for homeowners insurance.
PMI: This stands for private mortgage insurance, which is required for homebuyers who make a down payment of less than 20%. PMI protects the lender in case the borrower defaults on the loan.
First Payment Date: This is the date of your first mortgage payment.
How Mortgage Payments Are Calculated
When you take out a mortgage, you’re borrowing a large sum of money that you’ll pay back over a period of years. Your mortgage payment is made up of two parts: principal and interest.
The principal is the amount of money you borrowed to purchase the home. Each month, a portion of your mortgage payment goes towards paying down the principal balance of your loan. Over time, as you make more payments, the monthly principal balance decreases and you own more of your home.
The interest is the cost of borrowing the money to purchase your home. It’s calculated as a percentage of your outstanding loan balance and is paid in addition to your monthly principal payment. The mortgage interest rate is typically determined by several factors, including your credit score, the size of your down payment, and the current market interest rates.
To calculate your mortgage payment, lenders use a formula that takes into account the principal amount, interest rate, and term of the loan. The loan term is the amount of time you have to pay back the mortgage, typically 15 or 30 years.
It’s important to note that your mortgage payment may also include other costs, such as property taxes, homeowners insurance, and private mortgage insurance (PMI), if applicable. These additional costs will be factored into your monthly payment as well.
Definitions You May Need to Know
Simple Interest Rate: An interest calculation that is based only on the principal balance of the loan, without taking into account any other factors such as fees or compounding interest.
Annual Percentage Rate (APR): APR is a more comprehensive measure of the total cost of borrowing money, as it includes both the interest rate and any other fees or charges associated with the loan, such as origination fees or closing costs. The APR is expressed as a percentage and is required by law to be disclosed to borrowers.
Principal Balance by Year: This is the remaining amount owed on your mortgage at the end of each year. As you make payments on your mortgage, the principal balance decreases. The Principal Balance by Year helps you understand how much you’ll still owe on your mortgage at the end of each year.
Mortgage Amount: The total amount of money you’re borrowing to purchase a home. It’s typically based on the purchase price of the home, minus your down payment.
Interest Rate: The annual interest rate on your mortgage. It’s the percentage of your outstanding loan balance that you pay in interest each year.
Monthly Payment: Amount of money you’ll pay each month to your lender to cover the principal and interest on your mortgage. It’s usually calculated based on the mortgage amount, interest rate, and term of the loan.
Total Payments: The total amount of money you’ll pay over the life of your mortgage, including both principal and interest.
Total Interest: The total amount of money you’ll pay in interest over the life of your mortgage. It’s based on the interest rate, mortgage amount, and loan term. The longer the term of the loan, the more interest you’ll pay over time.