Making the Most of a Mortgage Calculator

Exterior of two-story home with 3-car garage at sunset

A mortgage calculator can be very helpful when you’re deciding how to approach the financial side of buying a home. It can give you a ballpark figure of what your monthly mortgage payment may be so you can estimate expenses. It can also help you decide if you might prefer a fixed-rate or an adjustable-rate loan, or a 15- or 30-year loan term.

Experiment by entering the numbers for one home price and interest rate—and then alter the figures to see different scenarios. Want to see your monthly payment if you increase your down payment or decrease the mortgage term? Give it a try. We’ve outlined some details to consider when you’re deciding what to add into your mortgage calculator of choice.

Sales price: What price is the home listed for according to the sales center or website? 

Options and upgrades: At Richmond American, we typically tell buyers to plan to spend around 20% of the purchase price on fixtures and finishes, as well as structural extras like an extended great room or an extra bedroom. If you’ve been dreaming of home theater wiring or something specific, be sure to ask for a rough price to help you estimate.

Estimated total purchase price: This would be the sum of the sales price and options and upgrades, giving you the estimated total with both included.

Down payment: This is the amount of money you’ll put down at closing. Contact a loan officer at HomeAmerican Mortgage to learn the minimum down payment required for the types of loan you are considering: 866.400.7126. It can vary dramatically from 0% on VA loans to 20% of the purchase price, depending on your circumstances, so you’ll want to get an accurate figure.

Tip! Need help saving for a down payment? Check out our article on Down payment savings strategies.

Loan amount: This is the estimated total purchase minus your down payment. This figure will be used to help determine the estimated amount of your monthly mortgage payment.

Term (years): This is the period of a loan. Typical terms span 15 or 30 years. This number can dramatically affect your monthly payment.

Interest rate: This is the amount charged, expressed as a percentage of principal, by a lender to a borrower. Contact a loan officer to get an estimate of the current rate for estimating purposes. You will not be guaranteed a particular rate until you lock one in during the loan process.

Yearly property tax: This is the tax assessed on real estate by the local government and is usually based on the value of the property (including the land). Tax information is public record, so you may be able to see what similarly priced houses have paid in taxes in years past in the same county. Look up existing homes on and click price/tax history for a rough number.

Yearly property insurance: This insurance protects the homeowner from many risks related to weather, as well as potential liability from events that occur on the property. Contact American Home Insurance for more information on how much insurance may cost on the home you are considering: 888.325.8108.

Remember, a mortgage calculator is just a tool for giving you a ballpark estimate. For mortgage advice, please contact a loan officer. HomeAmerican Mortgage Corporation would be happy to help!