Mortgage Calculator - Tamil Numerals

Input: $300,000 home, 20% down, 4.5% rate, 30 years

Result: Loan: $240,000. Monthly P&I: $1,216.04. With $3,600/yr tax and $1,200/yr insurance: PITI = $1,566.04/month.

Why does my amortisation schedule show so little principal in the first year?

On a 30-year mortgage at 6%, only about 10–15% of your first year's payments go toward principal — the rest is interest. This is because interest is calculated on the remaining balance, which is at its highest at the start. By year 20, the ratio flips: most of each payment goes to principal. This is why making extra payments early in the loan has a much larger impact than the same extra payment made years later.

How much house can I actually afford — the 28/36 rule explained

The 28/36 rule is a guideline lenders use: your monthly housing payment (PITI) should not exceed 28% of your gross monthly income, and your total monthly debt (including the mortgage, car loans, student loans, and credit cards) should not exceed 36%. Enter your income in the calculator and set the home price so that the PITI result stays under 28% of your monthly income. This gives you a realistic purchase price ceiling, not just what a lender will approve.

What is PMI and when can I remove it?

PMI (Private Mortgage Insurance) protects the lender if you default. It is typically required when your down payment is less than 20% of the home value. PMI costs 0.5-1% of the loan amount annually and can be removed once you reach 20% equity — either through paying down the principal or through home appreciation. For conventional loans, you can request PMI removal at 80% LTV; it automatically terminates at 78% LTV.

How do I estimate property taxes and insurance?

Property taxes vary by location but typically range from 0.5-2% of home value annually. Homeowners insurance averages $1,200-$2,000/year. Check with local tax assessors and insurance agents for accurate estimates in your area.

Should I choose a 15-year or 30-year mortgage?

15-year mortgages have higher monthly payments but significantly lower total interest costs. 30-year mortgages have lower monthly payments but you'll pay more interest over time. Use our calculator to compare both options based on your budget and financial goals.

What is the difference between PMI and MIP, and which one applies to my loan?

PMI (Private Mortgage Insurance) applies to conventional loans with less than 20% down. MIP (Mortgage Insurance Premium) applies to FHA loans and has two parts: an upfront premium (1.75% of the loan amount, typically rolled into the loan) and an annual premium (0.45-1.05% of the loan, paid monthly). Unlike PMI, MIP cannot be removed on most FHA loans originated after 2013 — you must refinance into a conventional loan to drop it. VA loans have a funding fee but no ongoing mortgage insurance. Knowing which type your loan has is critical because MIP can cost $200-$400/month for the life of the loan, while PMI can be removed at 80% LTV.

How do I calculate my loan-to-value (LTV) ratio and why does it matter?

LTV is your loan amount divided by the appraised home value, expressed as a percentage. If you borrow $240,000 on a $300,000 home, your LTV is 80%. LTV matters because: (1) above 80% LTV, conventional loans require PMI; (2) above 95% LTV, some lenders decline the loan or charge higher rates; (3) below 80% LTV, you get the best rates and no PMI. To lower your LTV, increase your down payment or negotiate a lower purchase price. Use this calculator by entering different home prices and down payments to see how LTV affects your monthly payment.

What closing costs should I expect when buying a home?

Closing costs typically run 2-5% of the loan amount and include: origination fees (0.5-1%), appraisal ($300-$600), title insurance ($500-$1,500), survey ($300-$700), attorney fees (varies by state), recording fees, and prepaid escrow for property taxes and insurance (3-6 months upfront). On a $300,000 loan, expect $6,000-$15,000 in closing costs. Some lenders offer "no closing cost" mortgages, but these typically come with a higher interest rate — you pay the costs over time instead of upfront. Use this calculator to compare: enter the higher rate to see how much extra interest you pay over the term versus paying closing costs upfront.

How does an escrow account work and what does it cover?

An escrow account is set up by your lender to collect money for property taxes and homeowners insurance as part of your monthly payment. Each month, 1/12 of your annual tax and insurance bill goes into escrow. When the bills come due, the lender pays them from escrow. Your total monthly payment (PITI) = Principal + Interest + Taxes + Insurance. The calculator shows the principal and interest portion; add 1/12 of your annual property taxes and insurance to get your full PITI payment. Escrow is required for most loans with less than 20% down; it may be optional (but recommended) with 20%+ equity.

What happens if I make one extra mortgage payment per year?

One extra payment per year on a 30-year mortgage at 6% can shorten the loan by about 5 years and save tens of thousands in interest. On a $250,000 loan at 6.5%, the standard monthly payment is $1,580. Making one extra $1,580 payment each year (or splitting it into $132/month extra) reduces the term from 30 to ~25 years and saves approximately $68,000 in interest. Use the calculator's extra payment feature to model your exact loan amount and rate — the amortisation schedule will show the shortened term and reduced total interest.

How do I decide between a fixed-rate and an adjustable-rate mortgage (ARM)?

A fixed-rate mortgage (FRM) keeps the same rate for the entire term — predictable but typically starts higher. An ARM has a lower initial rate for a set period (e.g., 5/1 ARM = fixed for 5 years, then adjusts annually), but the rate can rise significantly at adjustment. ARMs make sense if you plan to move or refinance before the first adjustment, or if you expect rates to fall. They are risky if you plan to stay long-term, since rate caps typically allow increases of up to 5% above the initial rate. Use this calculator to model both: enter the FRM rate to see the stable payment, then enter the ARM's initial rate and imagine it rising by 2-3% at the first adjustment to see the worst-case payment.

What is a jumbo loan and how is it different from a conventional loan?

A jumbo loan exceeds the conforming loan limit set by Fannie Mae and Freddie Mac. In most US counties, the 2024 conforming limit is $766,550; in high-cost areas it can go up to $1,149,825. Loans above these limits are jumbo loans, which typically require: 10-20% down payment (vs 3-5% for conventional), a credit score of 700+ (vs 620), a DTI of 43% or lower, and 6-12 months of cash reserves. Jumbo rates are sometimes lower than conventional rates because lenders hold these loans on their own books rather than selling them. Use this calculator with loan amounts above the conforming limit to see the payment — the math is the same, but the qualification requirements are stricter.

How do I calculate the break-even point for refinancing my mortgage?

The break-even point is when your cumulative savings from the lower rate equal the closing costs of the refinance. If refinancing from 7% to 6% on a $300,000 loan saves you $200/month and closing costs are $4,500, the break-even is 22.5 months ($4,500 / $200). If you plan to stay in the home longer than 22 months, refinancing pays off. But also consider: (1) refinancing resets the amortisation clock — you start paying mostly interest again, which can offset some savings if you are already years into the loan; (2) if you refinance into a shorter term (e.g., 30 to 20 years), the payment may not drop even though the rate is lower; (3) cash-out refinances increase your loan balance, so the break-even must account for the additional principal.

Are Tamil numerals the same as other South Indian numeral systems?

No. While Tamil, Kannada, Malayalam, and Telugu all share a Dravidian script family, each has distinct numeral glyph forms. Tamil numerals (௦–௯) look different from Malayalam (൦–൯) or Kannada (೦–೯) numerals, so use the specific numeral mode for your language.