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Extra Payments
Making extra payments can significantly reduce your loan term and save you thousands in interest.
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Amortization Schedule
| Period | Payment | Principal | Interest | Total Interest | Balance |
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Affordability Analysis
Income & Expense Analysis
Affordability Insights
Recommendation
This home is within your affordability range but may stretch your budget. Consider a higher down payment or finding a less expensive property for more financial comfort.
Housing Cost Breakdown
Mortgage Education Center
Mortgage Glossary
The process of paying off a debt (like a mortgage) through regular payments over time. An amortization schedule shows how each payment is split between principal and interest.
The yearly cost of a loan including interest and fees, expressed as a percentage. APR is typically higher than the interest rate because it includes additional costs.
An account held by a third party (like a lender) that collects money for property taxes and insurance. Part of your monthly payment goes into this account, and the lender pays these bills when due.
Insurance that protects the lender if you stop making payments on your loan. Typically required when your down payment is less than 20% of the home’s value.
The ratio of your loan amount to the appraised value of the property, expressed as a percentage. Lower LTV ratios typically qualify for better loan terms.
Mortgage Tips
Improve Your Credit Score
Even a small increase in your credit score can significantly lower your interest rate. Pay bills on time, reduce debt, and check your credit report for errors.
Make Bi-weekly Payments
By making half your monthly payment every two weeks, you make 26 half-payments per year — equivalent to 13 full monthly payments instead of 12.
Consider Points
If you plan to stay in your home for several years, paying points to lower your interest rate might save you money over the life of the loan.
Avoid PMI If Possible
Save for a 20% down payment to avoid PMI, or look into loan programs that don’t require it. If you already have PMI, request cancellation when you reach 20% equity.
Frequently Asked Questions
Your credit score, down payment amount, loan term, loan type, loan amount, property type, and current market conditions all affect your mortgage interest rate.
Financial experts often recommend that your housing expenses shouldn’t exceed 28% of your gross monthly income, and total debt payments (including your mortgage) shouldn’t exceed 36%. Use our Affordability Analysis tool above to calculate your specific situation.
If you plan to stay in your home for many years and want payment stability, a fixed-rate mortgage is usually better. If you plan to move within a few years or expect rates to decrease, an adjustable-rate mortgage might save you money initially.
Pre-qualification is an informal estimate of how much you might be able to borrow based on self-reported information. Pre-approval is a more thorough process where the lender verifies your financial information and credit, providing a more accurate loan amount you’re likely to receive.
Make extra payments towards the principal, switch to bi-weekly payments, refinance to a shorter term, or round up your payments. Use our Extra Payments calculator to see how much time and money you could save.