Loan playbook / Mortgage calculation methods
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Mortgage calculation methods
Run the payment, compare a refinance, calculate break even, estimate cash needed, or test a DSCR deal.
Estimates
These tools show the math. They do not approve a loan.
The numbers already filled in are examples. Replace them. A result is not a rate, a payment you are locked into, or a final loan term. DSCR means debt service coverage ratio.
What they can show
Principal and interest from a standard amortization formula. A refinance payment next to the current one. How many months of savings it takes to cover estimated costs. Cash as down payment plus costs minus credits. A rent to payment ratio. Equity as value minus known liens.
What they cannot prove
That a lender will use your rent, your tax bill, or your credits. That mortgage insurance, flood insurance, or a Texas homestead rule will come out the way you hope. That you qualify. Change the inputs before you believe the output.
Monthly payment method
For a fixed-rate amortizing loan, monthly principal and interest depend on loan amount, interest rate and number of payments. Escrow, mortgage insurance and HOA are separate costs. A longer term can reduce the payment while increasing lifetime interest.
Run the full payment engine · Use the refinance break-even tool
Refinancing
Refinance comparison
Current principal and interest next to a new principal and interest- Current principal and interest
- $2,476
- New principal and interest
- $2,217
- Break even
- 27 months
This compares principal and interest only. It does not prove a lower total cost. A longer new term can cut the payment and still increase interest. Taxes, insurance, mortgage insurance, and cash taken out are not in this math. The filled in numbers are examples.
Buying
Estimated cash needed
Down payment plus estimated costs, minus creditsPrice is shown so you can see the down payment beside it. This formula cannot prove the cash a lender, a title company, or a program will actually require. Prepaid taxes, insurance, mortgage insurance, and minimum contributions can change the number. The filled in numbers are examples. Purchase price in this example: $450,000.
Equity
Home equity scenario
Value minus the liens you already know aboutEquity is not the same thing as cash a lender will let you take. Combined loan to value, Texas homestead rules, the property type, and the limits that lender sets all sit between this number and a check. The filled in numbers are examples.
Educational content updated October 9, 2026 · Lending reviewer approval pending · Not a commitment to lend.
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