The calculator shows the best rates available in your province, but you can also add a different rate. Then, select an amortization period and mortgage rate. Consulting with a mortgage broker or lender can also yield more in-depth insights into which type of loan is the best fit for you.To use the calculator, start by entering the purchase price. When considering a home loan, evaluate your current financial situation, long-term plans and risk tolerance. It's a riskier option and best suited for those expecting to sell or refinance before the balloon payment is due. They are designed for homebuyers looking to purchase high-priced or luxury homes.īalloon Mortgage: With this type of loan, you'll have lower monthly payments for a set period, after which the remaining balance is due in full. Jumbo Loan: A jumbo loan is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). After this period, you'll start paying both principal and interest, which can significantly increase your monthly payments. Interest-Only Mortgage: This type of mortgage allows you to pay only the interest for a set period, usually five to 10 years. Eligibility is based on the location of the property and the buyer's income. Department of Agriculture, these loans are designed for rural homebuyers and offer 100% financing, meaning no down payment is required. Department of Veterans Affairs backs these loans. VA Loan: For eligible veterans, active-duty service members and some members of the National Guard and Reserve, the VA Loan program offers mortgages with no down payment and competitive interest rates. These loans require a lower minimum down payment and have more lenient credit requirements than conventional loans. ARMs can offer lower initial interest rates than fixed-rate mortgages, but they carry the risk of the rate (and your monthly payment) increasing in the future.įederal Housing Administration (FHA) Loan: Backed by the Federal Housing Administration, FHA loans are designed for borrowers with low to moderate incomes. FRMs are ideal for those who plan to stay in their home long-term since they offer stability in monthly payments.Īdjustable-Rate Mortgage (ARM): With an ARM, the interest rate is fixed for an initial period (typically, five, seven or 10 years) and then adjusts periodically based on a specific index. These loans are typically available in 15, 20 or 30-year terms. The following are some of the most common mortgage options available:įixed-Rate Mortgage (FRM): The most traditional type of mortgage, an FRM has a constant interest rate and monthly payments that never change. Understanding the different types of home loans that are available can be enormously helpful when you're in the market for a new home or looking to refinance your current one. I = Monthly interest rate (your annual interest rate divided by 12) n = Number of payments (loan term in years multiplied by 12 months) P = Principal loan amount (with a negative number representing the amount borrowed) You can also use the PMT formula in Excel or Google Sheets to calculator your P&I payment: M = Monthly mortgage payment P = Principal loan amount (the amount you borrowed) i= Monthly interest rate (your annual interest rate divided by 12) n = Number of months required to repay the loan (loan term in years multiplied by 12)Ĭalculating Using Microsoft Excel or Google Sheets: Use the following formula to calculate your monthly mortgage payment: Here’s a breakdown of how to calculate your monthly mortgage payment using various methods:Ĭalculating by Hand Using the Mortgage Payment Formula: While online mortgage calculators are go-to tools for most people looking to find out their principal and interest (P&I) payment, knowing how to calculate this yourself can provide you with deeper insight into your home loan. GEEK OUT: EQUATION TO CALCULATE MORTGAGE PAYMENTS
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