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Home value
This is how much the property you wish to buy has been valued at. This data is only used to calculate the mortgage amount. If you know your loan amount, skip this field.
Down payment
The part of the price that you pay in cash and do not finance with a mortgage loan. If you modify either of the input fields, the other one will be automatically populated with the correct data. If you know your loan amount, skip this field.
Mortgage amount
The total amount of money to be borrowed from a lender or lending institution. This amount is applied toward the price of the property. Your payment amount heavily depends on this information.
Interest rate
The yearly interest rate or percentage rate that you, the borrower pay on your outstanding balance in the form of interest to the lender.
Mortgage length
Enter the mortgage length either in years or in months. If you modify one of the input fields, the other one will be automatically populated.
Payment frequency
This is the time interval between your payments. Choose from weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annually or annually options.
Origination fee
A fee charged to a borrower (especially for a mortgage loan) by a lender on entering into a loan agreement to cover the cost of certain processing expenses.
Discount points paid
The amount of money the borrower must pay the lender or lending institution to get a mortgage loan at a stated interest rate.
Other fees
Other fees relating to the process of mortgage application. This amount of money have to be paid to the lender by the borrower.
Annual percentage rate
Mortgage APR is a value created according to a government formula and is intended to reflect the true annual cost of borrowing. It is designed to allow customers to compare one type of loan to another. It includes interest and other mortgage loan fees. It is expressed as a yearly percentage rate. Required to be disclosed by the lender under the American Truth in Lending Act, Regulation Z.
Periodic payment
Periodic payment is the regularly paid amount of money to the lender or lending institution. It includes principal and interest, but excludes any amounts that are applied to taxes and insurance. Periodic payment is based on the annual interest rate, and NOT on APR. Annual percentage rate is ONLY for loan comparison.
Closing costs
These are expenses of administrative nature connected with the mortgage loan agreement. They are generally paid at the end of the life of the loan.
Annual interest rate to mortgage APR conversion
The annual (nominal) interest rate (rate of interest before adjustment for inflation) is the percentage of a sum of money charged for its use. For loans and mortgages, where the interest is paid for the use of the borrowed money this is the yearly percentage rate that one pays on an outstanding balance in the form of interest to the lender or lending institution.
The annual percentage rate or mortgage APR is a measurement of the full cost of a mortgage loan including interest, origination fee, discount points and other mortgage loan fees expressed as a yearly percentage rate. The APR must be disclosed to the borrowers by lenders (Truth-in-Lending Act).
Since the annual percentage rate combines the interest rate with other loan costs, into a single figure that shows the true annual cost of borrowing, it can be used for mortgage offers comparison. APR is also likely to be the highest rate shown on an advertisement.
Let us compare two fixed-rate mortgage offers ($250,000.00, 30 years):
First offer: interest rate: 3.99 percent, discount points: 1, origination fee: 2 percent, other fees: $1,000.00
Second offer: interest rate: 3.95 percent, discount points: 2, origination fee: 2 percent, other fees: $1,500.00
First offer results: APR: 4.26910 percent, monthly payment: $1,192.10
Second offer results: APR: 4.32540 percent, monthly payment: $1,186.34
As we can see, the monthly payment is higher for the first offer, but the APR is lower, which means, that this is the better offer. The total of 360 payments for the first offer is $429,155.07 and $427,083.51 for the second offer, but here we paid an extra discount point, which equals to $2,500.00 (1 percent of $250,000.00) and higher loan related other fees as well. Summing these up, we get $430,083.51 total.
Note that the annual percentage rate (APR) assumes that you will keep the mortgage loan for its full term, in the example above this is 30 years.
