# Real Estate Calculator

Real Estate Calculator

Home Price:
Downpayment (\$ or %):
Program:
Interest Rate (%):
Property Taxes (%):
Insurance (\$/yr):
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### Real Estate Definition

This Real Estate Calculator can be a useful tool for making important decisions about your next real estate purchase. By inputting a few key pieces of information, the calculator determines what your monthly payment will be. This lets you analyze parts of the loan that you can alter before hand – such as down payment and purchase price – to produce a monthly payment that you are comfortable with.

### Information to Input

• Home Price – This is the amount of money that you pay for the property. This is one aspect of the future loan that a home buyer can negotiate with a seller.
• Down payment – This is the amount of your own money that you are giving your lender towards the purchase of the property. The ‘home price’ minus your ‘down payment’ will become what is called the ‘principal’ of your loan. It can be expressed in the form of dollars or a percentage of the price. When you provide a higher down payment, the principal on your loan will be reduced and your payment will be lower. Depending on a borrower’s credit score, a lender may require a down payment in a certain amount – typically 20 percent of the purchase price – in order to secure the loan without purchasing additional private mortgage insurance.
• Program – While there may be other loan options available through your lender, this calculator focuses on the two most common: a 30-year fixed and a 15-year fixed. These names represent the term of the loan as well as how the interest rate will be determined. A 30-year fixed loan is one with a loan term of 30 years whose interest rate is fixed at the time of loan. This is in contrast to adjustable rate mortgages where the interest rate can fluctuate periodically during the loan period.
• Interest Rate – This is expressed as a percentage and equals the amount that a lender is charging you for the loan. This rate is usually somewhat negotiable with a lender depending on several factors such as down payment, credit score, co-signers, or programs that a borrower is eligible for – such as a Veteran’s Administration (VA) or Federal Housing Administration (FHA) loan.
• Property Taxes – For the purposes of this calculator, property taxes are expressed as a percentage. This amount is set by your local taxing authority and you are typically not taxed on the total value of your property. While it is not negotiable, there are usually exemptions – such as Homestead, Senior, Disabled Veteran, etc. – that can be filed once you own the property. Some areas express their property tax rate in the form of a millage, which is the amount of tax, in dollars, for every one thousand dollars of taxable value. This must be converted to a percentage for the calculator. Depending on your area, you may have taxes to fund multiple programs such as city, school, fire district, and county. All of these should be considered and added together to estimate your complete tax percentage.
• Insurance – This is expressed in dollars per year and is the amount that an insurance company charges annually for a property-owner’s insurance. This insurance is intended to protect both the homeowner and the lender from property loss, is usually a requirement for loan approval, and is separate from PMI or business insurance.

### Output

• Monthly Payment – This is the total amount you will have to pay for a property every month. By analyzing the final monthly payment, you can make more educated decisions about how to negotiate parts of the real estate purchase – such a home price and down payment.

Check out the rest of our financial calculators on the site to help with all your financial needs.

### How to Calculate Real Estate

Let's be honest - sometimes the best real estate calculator is the one that is easy to use and doesn't require us to even know what the real estate formula is in the first place! But if you want to know the exact formula for calculating real estate then please check out the "Formula" box above.