Use the ultimate mortgage calculator dave ramsey module to estimate your potential monthly payment, total interest cost, and overall loan amortization. Planning your debt payoff is the first step toward financial peace.
Mortgage Calculator (P&I Estimate)
Your Estimated Monthly Payment
$0.00
Total Interest Paid: $0.00
Total Cost of Loan: $0.00
Enter your values and click Calculate to see the step-by-step process.
Mortgage Payment Formula
The standard formula used to calculate the Fixed Monthly Payment (M) for a Principal and Interest loan is:
M = P [ r_m * (1 + r_m)^n / ((1 + r_m)^n - 1) ]
Where:
- P = Principal Loan Amount
- $r_{m}$ = Monthly Interest Rate ($r$ / 12)
- $n$ = Total number of payments (Term in years $\times$ 12)
Variables Explained
- Loan Amount: The total amount you are borrowing, excluding any down payment.
- Annual Interest Rate (%): The yearly cost of borrowing funds, expressed as a percentage. This is divided by 12 for the monthly rate.
- Loan Term (Years): The number of years over which you will repay the loan (e.g., 15 years or 30 years).
Related Calculators
What is “mortgage calculator dave ramsey”?
This term generally refers to a standard mortgage calculator informed by the financial principles of Dave Ramsey, which emphasize minimizing interest paid and accelerating debt payoff. His common advice includes opting for a 15-year fixed-rate mortgage over a 30-year loan and making extra principal payments.
A mortgage calculator is an essential tool for understanding the relationship between the loan amount, interest rate, and term, allowing you to see the true cost of borrowing over time.
How to Calculate a Mortgage Payment (Example)
- Determine Variables: Start with a $200,000 Loan Amount (P), 4.5% Annual Interest Rate (r), and a 30-year Term (T).
- Convert to Monthly: Calculate the monthly rate ($r_m = 0.045 / 12 = 0.00375$) and total payments ($n = 30 \times 12 = 360$).
- Solve the Formula: Substitute these values into the formula to find the monthly payment (M).
- Calculate Total Interest: Multiply the monthly payment by the total number of payments ($M \times n$) and subtract the original principal ($P$).
Frequently Asked Questions (FAQ)
He strongly recommends a 15-year fixed-rate mortgage. This dramatically reduces the total interest paid and accelerates the path to becoming debt-free, which is a core tenet of his financial plan.
What is the maximum house payment I should have?A commonly cited guideline, often associated with his advice, is that your total housing payment (including taxes, insurance, and HOA fees) should be no more than 25% of your take-home pay on a 15-year fixed-rate loan.
How does making extra principal payments affect my loan?Every dollar paid toward the principal reduces the outstanding balance, meaning less interest accrues over the life of the loan. This can save tens of thousands of dollars and shorten the term by years.
Should I pay off my mortgage early or invest?For most people, Ramsey advises paying off the mortgage as quickly as possible (after establishing a full emergency fund) to remove all debt, which he views as the biggest barrier to wealth building.