Conventional Loan Calculator – NerdWallet


This conventional loan calculator estimates your monthly payment if you are using a conventional fixed rate mortgage to buy a home. For example, if you invest 20% on a $ 280,000 house, with a 30-year conventional loan at an interest rate of 4%, your estimated monthly principal and interest will be $ 1,069.41 per month.

Calculate the monthly payment of your conventional loan

What is a conventional loan?

A conventional loan is a mortgage loan that meets certain loan limits and underwriting guidelines. There are many types of conventional loans, but the most common is a fixed rate mortgage that does not exceed $ 485,350, the compliant loan limit currently set by the Federal Housing Finance Agency.

How we calculate your monthly conventional loan payment

To estimate your monthly conventional mortgage payment, the calculator considers the price of the home you want to buy, as well as the down payment you plan to make. It then takes into account the term of the conventional loan – how many years it will take you to pay it off if you never miss a monthly payment – and a fixed interest rate.

Confused about the term of your loan or the interest rate? Use the calculator’s suggestion of a 30-year fixed term and a 4% fixed interest rate so that you can always see a general estimate of your monthly principal and interest payment. Also, try entering 15 or 20 years to see how a shorter term would affect your payments.

Nerd tip: Principal and interest are two of the main components of any mortgage. The principal of a loan is the total amount that you have to repay. Your principal balance will likely decrease each month as you make payments. Loan interest is the additional amount you pay a lender in exchange for being able to borrow money. This is why it is so important to get the best mortgage rate available.

How to use the conventional mortgage calculator

Calculating your conventional loan payment before you get serious with a lender is a smart move. Here is a step-by-step guide to using the NerdWallet conventional loan calculator:

2. Enter the dollar amount of the deposit you will make. A deposit of 20% will save you from paying mortgage insurance, but the minimum down payment for a conventional compliant mortgage is 3%.

3. Enter the number of years of your repayment term. Conventional loans often have terms of 15, 20 or 30 years.

After entering these required basic entries, the calculator will automatically update with a summary of your results. You will be able to see a monthly overview as well as a payment summary. Filling out the three advanced input fields will give you a more accurate estimate. (If you are not familiar with these terms, you can read more about how they affect your mortgage payment in the next section.)

7. Enter the monthly cost of everything HOA dues you may need to pay.

Factors That Affect Your Conventional Loan Repayment

Principal and interest are the backbone of every mortgage payment, but other costs and factors affect the total monthly amount. These factors include:

term of the loan

Conventional short-term loans usually have larger monthly payments because you agree to pay off the full loan amount in fewer years. Try entering a 15-year loan term into the calculator and compare the payment estimate with the 30-year term estimate for the same loan amount to see this in action.

Private mortgage insurance

Conventional mortgage lenders generally require borrowers to pay for private mortgage insurance, or PMI, when the down payment is less than 20%. If necessary, PMI premiums will be added to your monthly mortgage payment. Note: This conventional loan calculator does not include possible PMIs. You can use our PMI calculator to see how much private mortgage insurance could increase your monthly payment.

Property taxes

Although property taxes are usually due annually, your lender may charge you smaller amounts on top of your monthly mortgage payment. These additional payments are usually held in a escrow account, which your lender uses to pay taxes on your behalf. Property tax rates are set by the local government and can vary depending on the location and value of your home.

Home insurance

Lenders require this policy, sometimes referred to as risk insurance, to protect their investment in the event something catastrophic happens to the home. Again, although policy premiums are usually paid annually, lenders will usually allow you to pay a portion of the bill up front each month.

HOA fees

Homeowners Association fees vary based on community and amenities provided and may be due monthly, quarterly, or annually.

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