Mortgage Payment Calculator

Home Price

This is obvious. The purchase price of your home has a direct impact on your monthly payment. The more expensive the house, the higher the monthly payment.

Loan Type

Will you pay your loan off in 15 years or 30 years? Will it be fixed rate or adjustable rate? In a low rate environment or an uncertain one like we are in now, it may be best to lock in a longer duration mortgage like 30 years with a fixed interest rate.

Interest Rate

Interest rates can play just as big as a factor as the purchase price of the home believe it or not. Since mortgages are long-duration assets, often 30 years, the vast majority of your monthly payment is going to pay down the accured interest each month with only a tiny portion actually paying down the princpal. Each month, more and more is paying down the balance of the principal, but for the first several years you are mostly paying interest. Because of that, a move from 3% to 6% mortgage rates like we’ve experienced in 2020 can lead to mortgage payments increasing by 50%!

Down Payment

This, too, should be obvious. The more you put as down payment, the less you are financing and therefore the lower your monthly payment. A typical down payment is 20%, but if you qualify as a first-time homebuyer or are a veteran, there are preferred mortgages you may qualify for which have reduced down payment requirements among other benefits.

Home Insurance

Homeowner’s Insurance varies quite a bit based not just on home value, but also on the state your property is located, the age and composition of the property, and a number of other variables. You should always contact an insurance agent to get a quote, but a good rule of thumb is to allocate anywhere from .25% to .5% of the purchase price to your annual homeowner’s insurance expense, then divide by 12 to get a monthly number. For instance, for a $1m home, .25% would be $2,500/12 = $208.33/month.

Property Tax

Taxes vary from state to state and even city to city so it’s important to use county websites like Travis County Tax Office to verify the tax rate that is listed on a For Sale listing. In Austin, TX a typical Property Tax rate may be around 2.2%. For instance, for a $1m home in Austin, 2.2% would be $22,000/12 = $1,833.33/month. Keep in mind, Texas does not have state income tax so our property taxes are typically on the higher side as we have to pay for our public services somehow. Also, there are certain exemptions and limits to property taxes such as the Homestead exemption and exemptions for those ages 65 and older. See here for more info.

HOA Fees

When purchasing a condominium you will always have an monthly HOA payment. Condos have Homeowners Associations which are in charge of managing the public areas of the residences. Typically, owners are in charge of everything within the four walls of their dwelling, while the HOA is responsible for everything else. This may include the exterior such as the roof, siding, parking lots, underground garages, elevators, community pools, community landscaping, insurance, wages for the HOA management staff, etc. HOAs are a beast of a topic in and of themselves, but for the purpose of this article, just know exist in all condos, but also in many communities with single family houses where resources are shared. They can range anywhere from $30/month to $x,xxx. Be sure to dig into the property listing for all the details as well as any Special Assessments that may be upcoming to cover one-time charges or the refill the HOA reserve coffers.

Home Maintenance Costs

Most property payment calculators stop here with ours being no exception, but every homeowner knows that their expenses do not. Here we list a number of additional route home expenses you will surely come across as a homeowner.

Home Warranty

Home warranties are great when you can use them and terrible when you can’t. They typically range from $400-$1,000 per year and you can often get the seller to pay for the first year during home purchase negotiations. Home warranties will cover everything ranging from your microwave to your TV, but beware, there are numerous limitations. So buyer beware. If you decide to move forward with one, check the Better Business Burea (BBB) to ensure the company you plan to choose is not rated poorly.

Seasonal HVAC Maintenance

We could probably just say “Maintenance” generally as any home inspection report will typically consist of numerous references to “we recommend servicing this on a ‘x’ basis. When it comes to your A/C and furnace, as they are typically on the pricier side, it is definitely recommended to service the A/C each Spring before its busy season and your furnace in the Fall before its busy season. This will ensure they are running optimely which means you’ll feel good inside your home and they won’t need replacing earlier than expected. On that note, be certain to stay on top of your air filters, changing them anywhere from monthly to annually based on the specific filters you purchase.

Lawn Service

If you are part of an HOA, your lawn may be taken care of for you or you may be required to keep the yard in a certain presentable manner (some municipalities can issue citations for this as well). All labor has gone up in 2022 and lawn service is no different. Don’t forget to winterize your in-ground sprinklers and wells as well, if applicable.

Pool Cleaning & Maintenance

If you paid up to get a pool or to get one installed, don’t skimp out on the weekly cleanings or the semi-annually or quarterly filter cleanings. Doing so could cost you in the long-run as it doesn’t take long for a pool to turn green or the calcium to build up around the water level.

Pest Control

If you are moving to Texas from out-of-state, get ready for creepy crawlies. Texas is home to a number of spiders and snakes, venomous and non-venomous alike - just Google “Tarantula Migration Texas”. Don’t worry, though, we also have amazing Roadrunners that love to eat rattlesnakes and the likes. In all seriousness, encounters are rare, but still unwanted, so be certain to check into a reputable pest control company. Mosquito treatments are also great if you can get your neighborhoods on board as well.

Handyman

Move over landlord, there is a new sheriff in town. And that sheriff is you unless you find a handyman. Things will surely need repair or replacement, and while it feels good to do things yourself, sometimes the frustration isn’t worth the cost-savings.