How to Estimate Monthly Mortgages
- 1). Subtract the down payment from the price of the home to get an estimate of the amount of the mortgage.
- 2). Divide the figure in Step 1 by 1,000. For example, if you will have a mortgage of $175,000, your figure is 175.
- 3). Multiply the figure from Step 2 by 6 for a mortgage with an interest rate of 6.00%. In this example, 175 times 6 calculates to a monthly mortgage payment estimate of $1,050. If your interest rate is below 6.00 percent, subtract 0.16 from 6 for every 0.25 percent and multiply that by your figure from Step 2; if your interest rate is above 6.00 percent, add 0.16 for every 0.25 percent above 6.00 percent and multiply that by your figure from Step 2. Thus, an interest rate of 5.75 would yield an estimated mortgage of $1,022 in this example (175 x 5.84), and an interest rate of 6.25 would yield an estimated mortgage of $1,078 (175 x 6.16).
- 4). Check your local property tax requirements to see what your obligations will be beyond just the cost of the mortgage. Take the annual total and divide it by 12 and add it to your monthly total. Add in as well the monthly insurance premium on the property. In addition, if you were required to get PMI insurance on the mortgage, add that monthly amount, too.