Skip to main content
Calculator

Home Loan Calculator

Trying to find a mortgage that's right for your budget? Amplify Credit Union's Home Loan Calculator can help.

Figuring out your budget may not be the most exciting step in the home buying process, but it just might be the most important. Knowing exactly how much house you can afford allows you to purchase a home confidently without worrying about the financial strain down the road.

Unfortunately, planning for a home mortgage isn’t exactly as easy as dividing a purchase price by the number of months you plan to take to pay it off. Thanks to interest and amortization schedules, the calculations are a little more complicated. This home loan calculator can help you with the heavy lifting and give you a better idea of what your financing situation may look like.

Start your home search off on the right foot by looking within your budget. For more information about the terms used on the calculator, refer to the list of definitions below the tool.

Important Terms to Know for the Home Loan Calculator

To help you out with the home loan calculator, we compiled a list of related definitions. Use this section to help you understand the calculator results and how you can adjust your budget as a prospective home buyer.

Amortization

Amortization refers to the process of paying off debt over time through regular payments that cover both the principal and interest.

The amortization table on the calculator shows you how much goes towards your principal versus the interest with each payment you make. Amortization tables, also called amortization schedules, are based on a specific maturity date (aka your loan term). You’ll notice that less of your payment goes towards interest and more goes towards the principal balance as time goes on. 

Keep in mind that this calculator’s amortization table does not account for the extra payments you make. Additional principal payments can reduce the amount of interest you pay and shorten amortization.

Extra principal payment

Some homeowners make extra principal payments - in addition to the required monthly payment - to bring down their loan balance. Making additional payments towards your principal loan balance can help you build equity in your home faster, save you in interest payments, and allow you to pay off your mortgage more quickly.

Notice how moving the extra payment slider affects the amortization table. Even putting a little extra towards the principal each month can allow you to pay off your mortgage years ahead of schedule. Over time, each of these extra payments adds up.

Monthly loan payment

Loans are repaid through monthly installments. Keep in mind that loan payments are typically composed of four components: principal, interest, taxes, and insurance. Taxes and insurance are not set amounts and can vary due to several factors such as location. Because of this, we have limited the monthly payment estimates to principal and interest only.

For a more accurate breakdown of your prospective loan payment, talk to a loan officer or real estate professional. They will understand the market and the associated costs and provide you with all the information you need.

Loan amount

The loan amount is simply how much you are borrowing. It is important to remember that this is not the house’s purchase price— just the money that the bank lends you. If you need to estimate your loan amount, subtract the amount you have set aside for a down payment from the home’s purchase price. This is the amount of money that you will need to borrow.

The down payment is the initial payment that a borrower puts up when purchasing a house. Homebuyers will put a percentage of the home’s value down (usually between 5% to 20%) and borrow the rest.

Loan rate

The loan rate, which you might commonly hear referred to as the interest rate, is what a lender charges in exchange for letting you take out a mortgage loan. It is calculated as a percentage of the loan balance. 

On a traditional fixed-rate mortgage, this percentage will not fluctuate over the loan course. Adjustable-rate mortgages (ARMs), on the other hand, have interest rates that are subject to change. This calculator assumes a fixed-rate mortgage that does not change over time. Several factors determine your loan’s interest rate, including your credit score and history, the house’s location, the loan amount, the size of your down payment, the loan type, and more.

Loan term

The loan term is just another way to say the total length of the loan. The most common loan term is 30 years, but 15-year and 20-year loans have become increasingly common. A mortgage with a longer loan term requires smaller monthly payments paid for a greater period of time. On the other hand, a mortgage with a shorter term will have larger payments, but the borrower will repay the money much sooner.

Your loan term can be an essential factor in what kind of home you choose. If you have a financial advisor, consider talking to them about your long-term plans and how a 30-year term might fit in those goals.

Mortgage principal

All mortgage payments are made of at least two main components: principal and interest. The principal is the amount that you borrow from the bank when you take out your loan. This means that your initial principal balance will equal your loan amount. 

As you pay off your mortgage, your principal balance will decrease. Keep in mind that most traditional mortgages, your first payments will consist mainly of interest. As you continue to pay off your loan, more of your monthly payment will go towards your principal balance. This is depicted in the amortization table section of the home loan calculator.

Total interest

You’ll see a section at the bottom of the calculator called “Results.” This means the amount of interest you pay over the life of the loan.

Before You Decide Your Budget

Once you have a sense of your market’s home prices, you may decide you have a firm handle on your budget. But there is still a lot of work to do before you lock in your rates. Before you get serious about your home search, talk to a lending professional about how best to prepare your budget to purchase a new home.

Loan officers can help you get prequalified for a mortgage and start putting some concrete numbers in place as you begin your search. Even better, a loan officer can help you identify ways to improve your status as a borrower if the house of your dreams is just a little outside of your reach.

The sooner you talk to someone about your finances, the better you can prepare yourself to make this once-in-a-lifetime purchase.

More Calculators

Looking for more tools to help get your finances in order? Check out Amplify Credit Union’s Financial Calculators page for calculators that will help you do the math with everything from retirement to debt consolidation to saving for college. 

Ready to Talk to a Mortgage Expert?

Learn how Amplify Credit Union's real estate lending team can support your next purchase.

Meet Our Team