Mortgage Calculator

We know that understanding the financial side of building a new home can feel overwhelming. That’s why we created this easy-to-use mortgage calculator — to help you gain clear visibility into what your monthly costs could look like. Just enter a few details to see your estimated payment, a full cost breakdown, and an amortization schedule — giving you the financial insights you need to make confident, informed decisions about building your new home.

Estimate Your Monthly Mortgage Payment

Understanding Your Mortgage Costs

How to Use the Mortgage Calculator

Understanding your budget is an important first step when planning a new home. Use the calculator above to estimate your monthly mortgage payment by entering a few simple details:

Home Price – Enter the estimated purchase price of your home
Down Payment – Add either a dollar amount or a percentage of the price. A higher down payment reduces the size of your loan
Loan Term – Select how long you plan to repay the loan. Common terms are 15, 20, or 30 years
Interest Rate – Use the rate your lender provides or an average market rate
Property Taxes – Estimate your annual taxes based on your location
Homeowners Insurance – Include your expected annual premium
PMI (Private Mortgage Insurance) – Applies if your down payment is less than 20%
HOA Fees – Add monthly dues if your home is part of an association

What's Included in a Mortgage Payment

A typical mortgage payment covers more than just paying down your loan. It often includes several recurring costs that vary by location and loan type:

Principal – The portion of your payment that reduces your loan balance
Interest – The cost of borrowing money from your lender
Property Taxes – Local taxes based on the assessed value of your home
Homeowners Insurance – Protects your property from damage or loss
PMI – Private Mortgage Insurance, if your down payment is below 20%
HOA Fees – Monthly dues for homes within managed communities or condos

Understanding the Mortgage Formula

Mortgage calculators use a standard formula to estimate your principal and interest payment based on your loan amount, rate, and term:

Where:

M = Monthly mortgage payment
P = Loan amount
r = Monthly interest rate (annual rate ÷ 12)
n = Total number of payments (loan term × 12)

For example, a $400,000 loan at a 6.5% interest rate over 30 years results in an estimated monthly principal and interest payment of about $2,528.

Keep in mind, your total monthly payment may also include taxes, insurance, and other expenses shown in the calculator.

Explore Different Scenarios

Our calculator makes it easy to see how small changes affect your overall payment. Try adjusting different factors to understand what fits best within your budget:

Compare a 15-year vs. 30-year loan to see differences in payment and interest
Adjust your down payment to reduce or eliminate PMI
Test how changes in your interest rate impact affordability
Include or remove taxes, insurance, or HOA fees for more accurate results

Loan Term and Interest Rate Basics

Your loan term and interest rate are two of the biggest influences on your monthly cost:

Shorter terms (like 15 years) mean higher monthly payments but less interest paid overall
Longer terms (like 30 years) offer smaller payments but higher total interest
Your interest rate depends on factors such as your credit score, loan type, and market conditions

Fixed vs. Adjustable Rate Mortgages

Choosing between a fixed-rate and adjustable-rate mortgage (ARM) depends on your goals:

Fixed-Rate Mortgage: Keeps your rate and payment consistent for the life of the loan
Adjustable-Rate Mortgage (ARM): Starts with a lower rate that may change over time — a good option if you plan to refinance or move in a few years

How Much Should You Spend?

A general rule is to keep housing costs manageable based on your income.

The 28/36 rule suggests spending no more than 28% of your gross monthly income on housing and 36% on total debt.

Example:
If your monthly income is $6,000, aim to keep your mortgage around $1,680 (28%), and all debt payments under $2,160 (36%).

Mortgage Amortization Explained

Amortization is how your loan balance decreases over time.

In the early years, most of your payment goes toward interest. As the balance shrinks, more of each payment reduces the principal. The amortization schedule in our calculator shows this shift clearly, helping you see how equity builds over time.

Ways to Lower Your Mortgage Payment

There are several strategies to make your mortgage more affordable:

Increase your down payment to borrow less
Choose a longer loan term to spread payments out
Shop around for lenders offering lower interest rates
Avoid PMI by putting down at least 20%
Look for homes with lower taxes or insurance costs
Research down payment assistance programs, especially for first-time buyers

At Canbury Homes, we understand that building a new home is a significant investment and the importance of securing the right financing for your new home project. Our team of building experts are here to assist you every step of the way, from choosing the perfect home design to navigating the financing process. Don't wait - contact us today to learn more about how we can help you turn your dream of owning a new home into a reality!