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Mortgage Rate Calculator

Created by Tibor Pál, PhD candidate
Reviewed by Wei Bin Loo and Steven Wooding
Last updated: Jan 18, 2024


We created this mortgage rate calculator to help you estimate the adjusted rate of your mortgage or APR, which includes applicable fees and expected changes in the applied mortgage rate.

Besides, you can learn other essential mortgage metrics, such as the estimated interest amount and monthly payments. Also, you can follow your balances and payments in the amortization schedule and on the dynamic chart.

Foremost, the mortgage interest rate calculator estimates for you the annual percentage rate (APR), which reflects the overall cost of your mortgage expressed in a yearly mortgage rate. It is a more comprehensive way to measure the cost compared to the applied mortgage rate, as it incorporates the applicable fees. Moreover, it also considers the expected fluctuations in the mortgage rate when you take an ARM mortgage.

Read further, and you can learn:

  • How to calculate monthly mortgage payment;
  • How to calculate mortgage interest rate; and
  • Why are mortgage rates going up.

How can I use the mortgage rate calculator?

You can easily employ our mortgage rate calculator by setting up the following parameters.

1. Main specifications

  • Loan balance — The amount of your mortgage;

  • Mortgage term — The remaining or original mortgage term;

  • Mortgage rate — Annual interest rate here;

  • Mortgage type — You can use our tool for both fixed and adjustable rate mortgages (ARM).

  • Compounding frequency (advanced mode) — How the lender computes interest on the principal;

If you choose other than a fixed-rate mortgage type, the following additional options will appear applicable for adjustable-rate mortgage (ARM).

  • Adjustments by:

    • Manual setup — Apply here the interest rate adjustment to be expected in the given adjustment frequency and the interest cap/floor; and

    • Trend — Set here the expected interest rate at the last period to let the interest rates be computed automatically in each period.

  • First adjustment after (customized) — Set the term for keeping the initial interest fixed; and

  • Periods between adjustments — Choose the frequency for potential interest rate adjustments.

2. Mortgage fees

After providing the main features of your mortgage, you can add the applicable fees, which can affect the final cost of your mortgage.

  • Mortgage points — An upfront fee as a percentage of the mortgage loan — learn more about it by our mortgage points calculator;
  • Up-front fee — The upfront fee paid on the mortgage; and
  • Annual fee — The yearly mortgage cost to be paid monthly (spread over the year).

The results will appear immediately after setting up the above parameters.

First, you can study the main features of your mortgage in a summary table. Most importantly, you can check the annual percentage rate, or APR, which is the cost of your loan as a yearly mortgage rate. It is a more comprehensive measure of the cost compared to the interest rate as it incorporates not only the interest rate but also emerging fees. Besides, it also accounts for the expected fluctuations in the applicable interest rate when you take an ARM.

  • Monthly payment;
  • APR (Annual Percentage Rate);
  • Term;
  • Paid interest; and
  • Total payments.

Also, you can follow the progression of balance in a chart and check the amortization table where you can see the applied interest rate (monthly schedule).

How do I calculate mortgage interest rate?

Calculating mortgages rate requires estimating the exponential base of the specific equation. When the equation takes a complex form, one efficient way to deal with such a problem is to apply the so-called Newton-Raphson method, which is a mathematical algorithm which involves an iteration process.

MP = P[r(1+r)n / (1+r)n-1]

where:

  • MP — Monthly payment, including any fees;
  • P — Loan amount;
  • r — Monthly interest rate; and
  • n — Repayment period in months.

Why are mortgage rates going up?

Central banks generally attempt to adjust interest rates when the inflation rate doesn't meet its target. When the inflation rate is high, this adjustment aims to reduce aggregate demand, which can be achieved prominently through the banking sector.

The higher mortgage rates deter households from taking mortgages and therefore buying houses. The lower demand may contribute to lower inflationary pressure through multiple channels, for example, lower housing investments. It remains uncertain how high mortgage rates will go.

FAQ

Will mortgage rates go down?

Yes, however, it is difficult to predict its timing. When the inflation rate becomes lower and meets (or gets close to) its 2 percent target, the Federal Reserve may decide to lower its policy rate (together with other monetary policy instruments), which eventually can lead to lower mortgage rates.

What is the monthly payment of a 30 year mortgage of $50,000 with 5% rate?

The monthly payment of a 30 years mortgage of $50,000 with a 5% fixed mortgage rate is $268.41.

Disclaimer

You should consider the mortgage interest rate calculator as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive.

For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice.

Tibor Pál, PhD candidate
Related calculators
Main configuration
Loan balance
$
Mortgage term
yrs
Mortgage rate
%
Mortgage type
Fixed-rate
Mortgage fees
Mortgage points
%
Up-front fee
$
Annual fee
$
Results
Display...
chart of balances
Schedule from...
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Monthly payment$1,073.64
Adjusted mort. rate (APR)5%
Term30 years
Paid interest$186,511.57
Total payments$386,511.57