Massachusetts Mortgage Calculator

Best mortgage lenders in Massachusetts

Mortgage lenders that are highly favored in Massachusetts have a nationwide presence. These include such recognizable names as Pentagon Federal Credit Union, AmeriSave, Rocket Mortgage. Several lesser known but trustworthy options include Massachusetts-based Drew Mortgage Associates Inc, Prestige Home Mortgage LLC.

How to calculate mortgage payment in Massachusetts

Use our mortgage calculator MA to evaluate your future monthly expenses. A detailed step-by-step instruction follows below.

Why and How to Use Our Mortgage Calculator

Use our house payment calculator Massachusetts for thorough planning of your future spendings. Let’s take a closer look at each field in order to gain a better understanding of the mortgage in Massachusetts parameters.

The initial consideration in the equation is the home price, which represents the amount you intend to invest in your future property. A down payment constitutes the upfront payment portion, and to avoid expensive insurance, it is necessary to provide a minimum of 20% down, particularly with a conventional loan. The remaining portion constitutes the principal, such as 80% of the home price when a 20% down payment is made.

The loan term signifies the duration required for complete mortgage repayment through scheduled payments. Fixed-rate conforming loans typically extend for a maximum of 30 years, whereas adjustable-rate alternatives generally come with shorter terms.

An interest rate denotes a fixed or variable percentage of the principal amount that you are obligated to pay over the course of the loan. It is important to note that you are actually subject to an annual percentage rate (APR), commonly abbreviated as APR, which is not identical to the interest rate. While the interest rate accounts for the majority of the APR value, the latter also encompasses various fees, such as origination fees, closing costs, and insurance payments, among others.

For more precise assessment, the interest rate used for these calculations is based on the current mortgage rates in Massachusetts, given a $400,000 home price and a 10% down payment.

Median property taxes in Massachusetts counties

Considering property tax is another key aspect when deciding on your future home. Many lenders require the creation of a mortgage escrow account to ensure that the borrower stays on top of their tax and insurance payments.

Source: American Communities Survey 2016, U.S. Census

Massachusetts Housing Market 2024

Over the past year, there has been a notable surge in the housing market's value in Massachusetts. This follows a well-established pattern that has been accentuated by the effects of the COVID-19 pandemic. However, it's worth noting that the rate of growth has slowed compared to the previous year. Meanwhile, both purchase and refinance rates have been steadily climbing and are anticipated to continue their upward trajectory in the near future.

How do I calculate my mortgage payment?

The most convenient way to do this is to make use of our calculator. It's powered by a simple formula, which you can also use to calculate the amount to be paid by hand:

M = P*i(1 + i)^n / (1 + i)^n – 1

M – estimated monthly mortgage payment;

P – principal;

I – monthly interest rate (to determine it, divide your annual mortgage rate by 12);

N – the loan term expressed in months (in other words, the overall number of monthly payments)

Consider you are seeking a 15-year mortgage loan with a fixed 6.99% APR (expressed as a unit fraction as 0.0699). The house is priced at $500,000, and you intend to make a 10% down payment, which amounts to $50,000. Therefore, the principal amount (P) will be 90% of the initial home cost, calculated as follows: $500,000 - $50,000 = $450,000.

I = .0699 % / 12 = .005825%.

Finally, we'll convert the loan duration from years into months: N = 15 * 12 = 180.

M ($) = 450,000*.005825(1 + .005825)^180 / (1 + .005825)^180 – 1 ≈ 4042.

So, you are going to pay about $4042 a month.

It is important to note that the calculated M value is approximate, as no extra fees are taken into account.

Tips for first-time home buyers in Massachusetts

To begin with, there are various federal agencies such as USDA, FHA, and VA that provide loan guarantees to eligible borrowers. These programs offer valuable options for many first-time homebuyers, allowing them to choose the one that best suits their financial situation.

In addition to these government-backed initiatives, it's worthwhile to explore offerings from the UHC (Massachusetts Housing Corporation) that cater to residents of Massachusetts. Specifically, first-time homebuyers meeting the qualifications for an FHA loan with a FICO score of at least 660 can apply for the FirstHome program, which provides assistance with down payments and closing costs. This program covers up to 6% of the loan amount for these expenses, but it's important to note that it takes the form of a 30-year fixed-rate second loan. If you don't qualify for the FirstHome program, there's an alternative option called the Massachusetts Housing Score Loan, which covers up to 4%. The minimum acceptable credit score for this program is 620.

Here are some valuable tips for first-time homebuyers:

1. Obtain pre-approval in advance. This not only enhances your credibility in the eyes of home sellers but is also advisable to obtain pre-approval letters from multiple lenders, ideally two or three.
2. Compare mortgage rates from different lenders. Consider a minimum of three lenders to make an informed choice.
3. Conduct preliminary calculations based on your pre-approved amount to plan for future expenses effectively.
4. Save as much as possible for your down payment, starting as early as you can. A larger down payment reduces the principal amount and can lead to lower overall expenses.
5. If you qualify for a VA loan, give strong consideration to this option.
6. Explore both government-backed programs and local assistance programs, as they often come with enticing offers that can benefit you.
7. If possible, work on paying off any existing debts to improve your financial profile during the homebuying process.