How Do I Calculate a 30-Year Fixed Mortgage?

A fixed-rate mortgage is a fixed-term loan at a fixed interest rate, meaning both the rate and the length of the mortgage will not change. Mortgages are available with terms ranging from 10 years to 40 years, though a 30-year fixed-rate mortgage is most common. Once you have found a home to purchase, you will need to calculate the mortgage and interest payments. This is a simple process using free online calculators.

Step 1

Collect mortgage details. You must determine the total amount of your mortgage and the interest rate of your loan. You also need to determine if you are required to carry private mortgage insurance, the annual property tax for your area and the cost of your homeowners insurance.

Step 2

Contact your local tax assessor's office to determine the property tax rate. Property tax is generally included in your monthly mortgage payment and is diverted into an escrow account by your lender to pay the yearly property tax.

Step 3

Contact your insurance agent to obtain a quote for homeowners insurance. You will have to determine what level and type of coverage you require. Your insurance agent will assist you in making these decisions. For most homeowners, your bank will collect additional money each month with your mortgage payment and place that into escrow to pay your homeowners premium.

Step 4

Find a free online mortgage calculator. This calculator will do the number crunching based on the information you provide about your mortgage amount, interest rate, property tax rate and homeowners insurance cost. The calculator will also allow you to input the monthly cost of private mortgage insurance, if necessary.

Step 5

Plug your mortgage details into the online calculator. The calculator will determine the monthly payment amount, including principal and interest payments.

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