These calculations are approximate and for information purposes only. Users use these calculations at their own risks and should not rely on this calculator to make any financial decisions. My Rate Compass does not guarantee the accuracy of amounts shown and is not responsible for any consequences of the use of the calculator.
Mortgage Affordability Calculator
What is a Mortgage afforability Calculator?
A mortgage affordability calculator can be used to assess how much your monthly mortgage payment will be based on the price of the home price, mortgage terms, interest rates, and down payment. You can use the mortgage calculator to estimate how much your monthly payment would be based on current interest rates and different down payment amounts. It is also a good way to ascertain the price range of homes that are affordable for you.
How to Estimate Mortgage Payments?
A mortgage calculator like the one at My Rate Compass is an excellent way to estimate how much your monthly mortgage payment will be. The mortgage calculator accounts for current interest rates, taxes, home insurance, down payment, mortgage term, and other applicable fees to determine what your monthly payment will be
What is a Mortgage Payment?
A mortgage payment is the monthly payment you make on your home loan.
How to Pay Off Your Mortgage Faster?
There are several ways you can pay off your mortgage faster, dependent upon whether you are attempting to pay it off within the next year or two or simply before the decade is over. Some people make biweekly payments when possible, while others budget to make one extra payment a year.
Others pay a little extra on their principal every month or choose a flexible term mortgage. If you are looking at a way to drastically reduce the length of your mortgage and you have a high-interest rate, you may want to consider refinancing your mortgage. Oftentimes securing a lower interest rate can help you shorten the term of your loan by a few years.
Key Factors that Can Affect Your Mortgage Payments
There are several factors that play a large role in affecting the amount you pay on your mortgage. Your credit is the first determining factor. Those with a higher credit score are considered a lower risk, thus they are offered more favorable terms and a lower interest rate. This leads to the second, which are interest rates. Everyone has to pay an interest rate on their loan, but the base rate is determined by current industry-wide interest rates. If you have perfect credit you will be offered that basic number. If your credit is less than perfect or subpar, you will be offered a rate that is higher than the base number. Any time that base number fluctuates up or down, the amount you are offered varies proportionally with it. Thus, if you have a good credit instead of excellent credit, you will still benefit from a lower interest rate if the standard interest rate decreases.
Your monthly mortgage payment is also heavily affected by the length of the mortgage term. A long mortgage term will result in lower payments, but in the end, be more costly because of more incurred interest. On the other hand, you will need to pay more monthly for a short-term mortgage but save money on interest. Additionally, your mortgage payment will reduce for each additional amount you are able to toss towards the down payment. The higher the down payment, the lower your monthly mortgage payment. MyRate Compass can help you check current interest rates and input your own data to determine what rate you would expect a lender to offer.
Key Components of a Mortgage
There are four basic components to every homeowner's mortgage: principal, taxes, interest, and insurance. The sum of these four components added up and divided by your mortgage term equals the amount that you owe each month.