Alabama Mortgage Calculator

Home price

Down payment

Length of loan

Interest rate

ZIP code

Monthly payment

$1,529/mo

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Home price

$300,000

Monthly payment

$1,529/mo

Monthly payment breakdown

$1/mo

Principal & interest

$600

Property taxes

Homeowners insurance

HOA fees

Simple steps to get pre-approved

1

Share a few details

Tell us about your income, credit, and home goals—it takes as little as 3 minutes and won’t affect your credit score.

2

See your homebuying budget

In minutes, we’ll show you exactly how much you can get pre-approved for—so you know your price range before you shop.

3

Get your pre-approval letter

Download your letter instantly and start touring homes with confidence (and a stronger offer in hand).

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See what I qualify for

...in as little as 3 minutes –

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Alabama Mortgage Calculator with PMI & Taxes

A mortgage calculator for home loans can show your true monthly housing costs before you commit to a home loan.

Alabama home shoppers balance a lot of numbers: home prices, loan sizes, down payments, interest rates, property tax rates, mortgage insurance premiums, and so on.

A mortgage payment calculator shows how these variables come together to shape a home's monthly payment.

These tools are invaluable for comparing loan scenarios — and Better makes it easy by doing the heavy lifting for you. With access to an extensive network of investors, Better essentially “shops the market” on your behalf to find competitive rates, saving you the time and stress of lender-hunting. In fact, The Wall Street Journal named Better the Best Lender for Affordability in 2024.

What does a mortgage payment include?

Your monthly mortgage payment covers more than just the loan itself. Each component plays a specific role in homeownership costs, and understanding these pieces explains why your actual payment often exceeds the principal and interest amount. Our simple mortgage payment calculator lets you see the full picture upfront—principal, interest, taxes, insurance, and PMI—so there are no surprises later.

Principal and interest

Principal and interest form the core of every mortgage payment. Principal chips away at your loan balance, while interest compensates the lender. Early in your loan term, most of your payment goes toward interest, but this balance shifts over time as shown in an amortization schedule.

Taxes and insurance

Most lenders also require an escrow account to collect property taxes and homeowners insurance alongside your monthly payment. Property taxes vary dramatically by location and property value—expect anywhere from 0.5% to 2.5% of your home's assessed value annually. A $500,000 home might carry $2,500 to $12,500 in annual property taxes, depending on your area.

Homeowners insurance typically costs $1,000 to $2,000 yearly, protecting against structural damage and liability claims. Your lender requires this coverage to protect their investment in your property.

Private Mortgage Insurance (PMI)

PMI adds another layer of cost if your down payment is less than 20 percent. Understanding what PMI is helps you plan for this expense, which typically ranges from 0.3% to 1.5% of your loan amount annually. On a $400,000 loan, that translates to $100 to $500 monthly.

These components combine to create your total monthly housing obligation. A $400,000 loan at 6.5% might require $2,528 for principal and interest, but add property taxes ($800), homeowners insurance ($150), and PMI ($300), and your actual payment reaches $3,778.

Looking to reduce these costs? Explore ways to lower your mortgage payment or compare different types of mortgage loans to find better terms for your situation.

Mortgage payment formula for Alabama

Every mortgage payment calculator uses a mathematical formula to determine your monthly payment. This mortgage payment formula shows exactly how lenders calculate what you'll pay each month on your home loan.

The standard mortgage payment formula is:

M = P[r(1+r)^n]/[(1+r)^n-1]

Where:

M = monthly payment
P = principal (loan amount)
r = monthly interest rate (annual rate divided by 12)
n = number of payments (loan term in years × 12)

This formula calculates how much you need to pay each month to pay off your loan over its term. The resulting amortization schedule shows how each payment divides between principal and interest.

For a $300,000 loan with 5% annual interest (0.417% monthly) for 30 years (360 payments), the formula calculates a monthly principal and interest payment of approximately $1,610.

Your actual monthly mortgage obligation will be higher after adding property taxes, homeowners insurance, and possibly PMI. This is why budgeting for your monthly mortgage payment requires considering all these components together.

Mortgage calculators handle these calculations automatically, letting you focus on finding the right balance between loan amount, interest rate, and term for your financial situation. The formula might look complex, but the real value comes from testing different scenarios to see which combination works best for your budget.

How to lower monthly mortgage payments

Types of mortgage loans

Different mortgage loan types offer different strengths and weaknesses for borrowers. Understanding these differences helps evaluate which loan type aligns with your financial situation and payment goals.

Conventional loans are the most common choice, requiring as little as 3 percent down. Not every borrower will qualify for such a small down payment with a conventional loan. Or if they do, PMI will cost more, increasing the monthly payment.

Borrowers who can't get an affordable conventional loan should look into government-backed loan programs:

FHA loans: Offer low down payments (3.5 percent minimum) even when borrowers have average credit scores. These loans usually require mandatory mortgage insurance throughout the loan term.
VA loans: Offer veterans and active duty military members competitive rates with no down payment or PMI required.

Better offers conventional, FHA, VA, and jumbo loans—all with a streamlined digital process designed to close faster and no hidden fees or sneaky sales tactics.

Fixed rate vs adjustable rate loans

Rate structures create another important distinction.

Fixed-rate mortgages keep the same interest rate throughout the loan term, allowing principal and interest payments that never change. (Taxes and insurance portions of the payment can and likely will change over time.)
Adjustable-rate mortgages (ARMs) start with a lower initial rate, but then that rate adjusts after the initial rate period expires. The rate could increase or decrease, depending on market conditions when the rate changes. ARMs can make it hard to budget for monthly mortgage payments.

Better offers both fixed-rate and adjustable-rate mortgages, giving you flexibility to choose stability or lower upfront costs, depending on your needs.

What other mortgage loan types are there?

Jumbo loans exceed conforming loan limits, allowing borrowers to buy high-value real estate. These loans typically require higher credit scores and larger down payments.

Each loan type produces different results when you run the numbers. For example, a VA loan eliminates both down payment and PMI costs, while an ARM might show lower initial payments that increase over time.

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I was a little leery about doing this whole thing online, but...

This closing was the easiest by far that I’ve experienced. The Better team was amazing and always on top of everything; it seemed like they were working around the clock to get me to closing as soon as possible! I was a little leery about doing this whole thing online, but their system is super-simple to navigate and provide what they are asking for. Plus, I received near-immediate feedback on just about everything. Would definitely recommend and personally use again next time.

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10/03/2024

I was a little leery about doing this whole thing online, but...

This closing was the easiest by far that I’ve experienced. The Better team was amazing and always on top of everything; it seemed like they were working around the clock to get me to closing as soon as possible! I was a little leery about doing this whole thing online, but their system is super-simple to navigate and provide what they are asking for. Plus, I received near-immediate feedback on just about everything. Would definitely recommend and personally use again next time.

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Expert opinions

Why is it important to look beyond just principal and interest when using a mortgage calculator?

There are variable costs such as taxes and insurance which are also important to factor in affordability over time.

Gen Gonzalez

Loan Consultant

NMLS #1924902

What's your biggest piece of advice for using mortgage calculators?

There are a lot more (and sometimes better) options available if they connect with their loan consultant and have them help fine tune the mortgage to their needs.

Logan Mead

Loan Consultant

NMLS #2463713

Beyond rates, what are other key things homebuyers should compare when evaluating lenders?

Aside from rates homebuyers also need to consider the overall lender specific closing costs, origination fees as well as non-cost specific items that are important like service and closing speed.

Libby Owens

Senior Loan Consultant

NMLS #2089666

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Mortgage Calculator is for estimation purposes only. Real payments will vary and may include (but are not limited to) the following fees: home insurance, HOA payments, taxes, regional fees, etc. All calculations assume eligibility for the selected loan. This is not a commitment to lend.

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