Mortgage Calculator
What Is a Mortgage?
A mortgage is a secured loan used to purchase real estate. In most countries, including the U.S., Canada, the UK, and Australia, mortgage loans are repaid over 15 to 30 years. Each monthly payment typically includes:
- Principal: The original amount borrowed
- Interest: The lender's charge for using the money
Many mortgages also include an escrow or offset account, which holds funds for property taxes, insurance, or council rates. Until the mortgage is fully repaid, the lender holds a claim on the property.
In the U.S., over 70% of all mortgages are 30-year fixed-rate loans, while the UK often uses tracker or variable-rate mortgages. Canada and Australia have similar systems with fixed and variable options.
Key Mortgage Calculator Inputs
Our calculator is designed for global users with flexible options:
- Loan Amount: Total amount borrowed after subtracting the down payment from the home price.
- Down Payment: Upfront amount paid by the borrower. Often 10–20% of the home price depending on country and loan type.
- Loan Term: Common terms are 15, 20, or 30 years.
- Interest Rate: Annual rate charged by the lender (fixed only in this calculator).
Additional Options:
- PMI / LMI / Mortgage Insurance: Required in some countries when the down payment is below a threshold (20% in the U.S., 25% in Australia).
- Property Taxes / Council Rates: Local taxes charged on property value.
- Homeowners or Building Insurance: Mandatory in many countries to protect the structure.
- HOA / Body Corporate Fees: Applies to strata buildings or shared residential communities.
- Extra Payments: Monthly, yearly, or one-time payments to reduce interest and loan term.
- Cost Increase %: Annual increase in recurring costs due to inflation.
Recurring Costs Included in Mortgage Calculation
1. Property Taxes or Council Rates
Tax levied by local governments. Varies widely by country and region — from about 1.1% in the U.S. to fixed annual amounts in the UK or Australia.
2. Home Insurance
Covers structural damage, disasters, and liability. Premiums depend on location, size, and insurance regulations in your country.
3. Mortgage Insurance
Called PMI (U.S.), Lenders Mortgage Insurance (LMI) in Australia, or Mortgage Default Insurance in Canada. Required if down payment is below certain thresholds.
4. HOA / Body Corporate Fees
Applicable in properties with shared amenities or buildings. Called HOA fees in the U.S., Body Corporate fees in Australia, and Service Charges in the UK.
5. Maintenance and Utilities
Although not calculated directly, it's wise to budget 1–2% of the home's value annually for maintenance, repairs, and utility bills.
One-Time, Non-Recurring Costs (Not in Calculator)
Closing Costs / Legal Fees
Includes inspections, legal documentation, stamp duties, title registration, mortgage setup fees, and government charges. Can range from 2% to 7% of the property value depending on your country.
Initial Renovations
Optional but often pursued before moving in. Includes flooring, paint, kitchen/bathroom upgrades, etc.
Furniture, Appliances & Moving Costs
Self-managed or professional movers — cost depends on distance, belongings, and services selected.
Early Repayment and Extra Payment Strategies
1. Extra Payments
Add monthly, annual, or one-time payments. Reduces principal, thereby reducing total interest and shortening loan term.
2. Biweekly Payments
Instead of 12 monthly payments, you make 26 half-payments yearly — essentially 13 monthly payments. This helps accelerate payoff.
3. Refinance
Replace your loan with one of a shorter term or lower rate. This often comes with new fees or legal costs, depending on your country.
Benefits:- Faster loan payoff
- Reduced interest costs
- Improved equity position
- Possible prepayment penalties
- Tied-up liquidity
- Lower tax deduction (if applicable in your country)
Global Mortgage Trends
- U.S.: 30-year fixed mortgages dominate; FHA and Fannie Mae programs offer low-down-payment loans.
- UK: Tracker mortgages and shorter fixed-rate terms are common; many remortgage after 2–5 years.
- Canada: High-ratio mortgages with CMHC insurance for low down payments; terms usually 5 years with 25–30 year amortization.
- Australia: Fixed and variable rates; common for buyers to refinance every few years to reduce rates; LMI applies for <20% deposits.
Governments in most Tier 1 nations support housing with tax incentives, first-home grants, or national lending programs.