Mortgage Calculator

Shopping for a Mortgage? Use our free mortgage calculator to easily estimate your monthly payment. See which type of mortgage is right for you and how much house you can afford.

Also, see below for our 5 tips to get the best mortgage rate and how to improve current your financial situation to qualify for the best mortgage rates.

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5 tips to get the best mortgage rate

Here are the 5 best tips on how to get the best mortgage rate:

Use a mortgage calculator

Getting a mortgage can be a complicated process. Even small changes can significantly affect your total costs.

A good first step toward understanding your future mortgage is to try out a mortgage calculator.

You can use a good mortgage calculator, like the one above to calculate your potential payment.

Additionally, a mortgage calculator will allow you to tweak the interest rate and terms of a mortgage and see how that affects the monthly payment and overall costs.

Also, a mortgage calculator helps you get a good understanding of how much you’ll be able to afford.

Improve your credit score

Next to income and debt ratio, your credit score is probably the most important factor in determining how much mortgage you will be approved for.

Lenders view credit scores as representative of how likely you are to repay a loan.

The most popular credit score, the FICO score, ranges from 300 – 850 as shown below.

The higher your score, the better the interest rate you’re likely to receive.

"Mortgage Calculator"

Many lenders also have minimum credit scores to qualify for a conventional mortgage.

For example, for conventional mortgages, You will need a score of at least 620.

Also, you will probably need a score of 580 or higher to get the lowest down payment requirement on an FHA loan.

The best mortgage rates, however, go to people with credit scores in the mid-700s or higher.

Therefore, if your score is lower than that, you might consider focusing on improving your score before applying for a mortgage.

Also, you can request copies of your credit report from the three major credit bureaus using a site like for free.

You can request a free credit report once a year using

Reduce your debt-to-income ratio

One of the most important, and often less discussed metrics that affects how much mortgage you are approved for is your “debt-to-income (DTI) ratio”.

The DTI is key metric lenders use when evaluating mortgage applications.

DTI measures all your monthly obligations compared to how much money you make.

Therefore, lenders consider DTI to see if you’ll be able to handle your monthly mortgage payment.

A higher debt-to-income ratio could mean you’re more likely to struggle with mortgage payments.

A 30% DTI is ideal (including your potential mortgage payment).

Generally, a ratio of 43% or higher (including your potential mortgage payment) is considered risky.

Also, a ratio of 50% is the maximum for many types of mortgages, including those from Fannie Mae.

Therefore, if your DTI is currently high, the best thing to do is pay down your debt.

By doing so, you are more likely to qualify for a mortgage and get a better rate.

Research homebuying assistance programs

Another great way to get the best mortgage is looking into state and federal programs that help people afford a home, particularly if you’re a first-time homebuyer.

Federal programs include:

FHA loans

These loans, insured by the Department of Housing and Urban Development (HUD), help people with lower credit scores qualify for a mortgage with a low down payment.

VA loans

Eligible service members and veterans may qualify for a mortgage with zero down payment.

USDA loans

People in rural areas may qualify for fixed-rate, lower-cost mortgages with zero down payment.

Homeownership vouchers

These are available to qualifying low-income people needing help buying a home.

Also, states often have more first-time homebuyer programs. This often includes down payment assistance.

To take advantage of these programs, contact your state housing finance agency or a HUD field office for more information on these programs.

Also, your lender may be able to help you find them as well.

Make a down payment of at least 20% to avoid PMI

Another great way to get the best mortgage is to consider making a larger down payment.

Some lenders and types of loans allow you to buy a home with a small down payment.

The average down payment for first-time buyers is between 3%-10%.

However, if you put less than 20% down on a property, you’ll need to buy private mortgage insurance (PMI).

Private mortgage insurance protects your lender if you fail to make your mortgage payments.

Typically, you’ll pay a monthly PMI premium as part of your regular mortgage payment until you qualify to drop the insurance.

For example, if you want to buy a $250,000 house, put 10% down ($25,000), and finance the rest ($225,000), your monthly PMI payment would be at least $60, but could end up north of $140.

Because PMI represents an additional cost, saving up to make a 20% down payment can help you save money down the road.

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