A small difference in rate on a large, long loan adds up to a lot of money. Lenders can differ by more on the same day and the same borrower than the market moves in a month, which makes shopping around one of the best-paid hours you will ever spend.

Mortgage payment calculator

Principal, interest and your full monthly cost. Works in any currency.

Enter a rate you were actually quoted. The default is only an example.

Fixed or adjustable

A fixed-rate mortgage holds the same interest rate for the term, so your principal and interest payment never changes. An adjustable-rate mortgage (ARM) starts at a set rate for a period and then resets on a schedule tied to an index. It can suit someone who is confident about moving or repaying before the first reset. Check the caps, and calculate the payment at the highest rate the contract allows.

Refinance break-even

How long until closing costs pay for themselves? Works in any currency.

Payment figures cover principal and interest only.

APR, points and fees

The interest rate sets your payment. APR folds in many lender charges, so it helps you compare loans. Points are upfront fees paid to lower your rate, and they pay off only if you hold the loan long enough. Compare the official Loan Estimate from each lender side by side.

Mortgage insurance

On US conventional loans with less than 20% down, lenders generally require private mortgage insurance. It protects the lender, not you. You can usually ask for it to be removed once you reach 20% equity under the original schedule, and it must generally end automatically at 22%, provided you are current on payments. FHA loans have their own rules. In Canada, default insurance is mandatory on down payments below 20%.

When refinancing pays

Refinancing replaces your loan and restarts closing costs. Forget old rules of thumb about a one-point rate drop. The real test is your break-even: closing costs divided by your monthly saving. Stay past that date and you win. Be careful with resetting to a new 30 years, because a smaller payment can still mean more total interest.

Before you apply

  • Check your credit reports and fix errors.
  • Get quotes from a bank, a credit union and a broker on the same day.
  • Ask about a rate lock, its length and its cost.
  • Budget for property tax, insurance, repairs and association dues as well as the loan payment.