USDA Mortgage Calculator
Our USDA Mortgage Calculator shows you the monthly payment, upfront and ongoing mortgage insurance fees and total monthly housing expense for a no down payment USDA home loan. Use our calculator to review numerous options for loan amount and mortgage terms to find the USDA home loan and monthly payment that match your housing budget.
How Our USDA Mortgage Calculator Works
The USDA Home Loan Program enables you to buy a home located in a rural community or area without making a down payment but the program requires you to pay extra upfront and ongoing USDA guarantee fees. Our calculator uses the following information to enable you to determine if a USDA mortgage is right for you:
USDA Mortgage Amount. This is amount of the USDA loan you are seeking. The larger your mortgage, the greater your monthly payment and other costs such as USDA mortgage insurance.
Interest Rate. This is the mortgage rate you pay on your loan. The lower your mortgage rate, the lower your monthly payment and the higher your rate, the higher the payment.
Mortgage Length. Also known as your loan term, this is the length of your mortgage in years. The longer your mortgage term, the lower your monthly payment and the shorter your mortgage, the higher your payment. A 30 year fixed rate loan is most popular type of USDA mortgage.
Down Payment as a Percentage of the Property Value. This is the portion of the property purchase price that you contribute as compared to your mortgage which you borrow from a lender. You are eligible for a USDA mortgage without making a down payment, but you can buy a higher priced property if you choose to use some of your own funds.
You can change the calculator inputs for loan amount, mortgage rate and length to learn how they affect your monthly payment. Our USDA Mortgage Calculator provides the following outputs:
Monthly USDA Mortgage Payment. Your mortgage payment is calculated based on your loan amount, mortgage rate and term.
Loan-to-Value (LTV) Ratio. This is your loan amount divided by the fair market value of the property being financed. Because the USDA home loan program does not require a down payment -- which means your mortgage amount can cover the entire property purchase price -- the LTV ratio for a USDA loan can be 100% or even higher if you include the upfront USDA guarantee fee you are required to pay. The calculator shows you how your LTV ratio changes if you choose to make a down payment, even though you are not required to.
Upfront USDA Mortgage Insurance. You are required to pay a one-time, USDA guarantee fee at closing. The fee is a fixed percentage of your loan amount and provides mortgage insurance for the lender in case you cannot repay your loan. Most borrowers finance the upfront guarantee fee which means it is added to your mortgage.
Ongoing Monthly USDA Mortgage Insurance. You are also required to pay monthly USDA guarantee fees after your mortgage closes. The monthly cost is calculated based on your mortgage amount.
Estimated Homeowners Insurance and Property Tax. When you own a home, you are required to pay homeowners insurance and property tax in addition to your monthly loan payment and USDA guarantee fee. While you usually pay your property tax bill and homeowners insurance premium every six months or yearly, our calculator shows you your estimated monthly expense. Property tax rates are set by local governments and homeowners insurance premiums are based on property value, level of coverage, provider and other factors.
Total Housing Costs. So you can understand the expenses associated with buying a property with a USDA mortgage, our calculator determines your total monthly housing costs including your loan payment (principal and interest), property tax, insurance and guarantee fee. The larger your mortgage and higher your property value, the higher your total housing costs. Understanding total housing costs helps ensure that you can afford to own a home after your mortgage closes.
Top Benefits of a USDA Mortgage
The Program Is Available More Places Than You Think
Although the USDA Home Loan Program is targeted at homebuyers in rural areas and smaller communities, the program is more widely available than you would think given this description. To be eligible for a USDA mortgage, the property being financed must be located in a USDA-designated rural area but approximately 95% of land in the United States with a population of over 100 million potential home buyers is categorized as rural according to USDA program guidelines. Odds are if you want to buy a home in a major metropolitan area or city the property is not eligible for a USDA mortgage but if you are looking to buy in a suburb or more rural area then the program may work for you. It is important to highlight that program eligibility is based on the location of the property being mortgages and not where you currently live. Because the program covers more area than you would expect, you should always check the USDA property eligibility website to determine if your target property qualifies. So do not let the term rural development prevent you from looking into a USDA mortgage as more properties are eligible than you would expect.
Buy a Home with Zero Money Down
For many borrowers the prospect of making a 20% down payment to buy a home is an insurmountable challenge, especially if you are living paycheck-to-paycheck. You may be able to afford a monthly mortgage payment based on how much rent you pay but you may not have much money leftover to save for a down payment. This is why the opportunity to buy a home with zero down payment is one of the most important advantages of a USDA loan. Even if you have some funds save for a down payment, this compelling program feature enables you to use that money to afford a nicer home or to pay for all or part of your mortgage closing costs including the upfront USDA guarantee fee. Simply put, by not requiring a down payment, the USDA Home Loan Program enables more people to buy homes.
Attractive Mortgage Rates
USDA mortgage rates are usually lower than the rates for many other no or low down payment programs. USDA loan interest rates are lower because the program is backed by the federal government and because program participants pay mortgage insurance mortgage guarantee fees. The government-sponsorship and insurance paid for by the borrower ensure that lenders recover their outstanding principal balance if the borrowers defaults on the loan and cannot repay the mortgage. We should highlight that USDA guarantee fees pay for insurance that protects the lender even though the borrower pays for them. The positive for borrowers is that lower USDA interest rates mean your monthly loan payment is lower plus the total interest expense you pay over the course of the loan is significantly reduced. While lower rates certainly benefit borrowers, we still recommend that you compare several lenders and select the USDA loan with the most attractive terms.
No Mortgage Limits
The USDA Program does not apply mortgage limits that cap your loan amount. Most conventional low down payment programs and government-backed programs including VA and FHA loans impose limits on what size mortgage you are eligible for. Although the USDA Mortgage Program uses applicant household income limits, not applying mortgage limits enables more people to qualify for the program and possibly obtain larger loans than they could with other programs.
Less Expensive Mortgage Insurance than Some Other Programs
One of negatives of a USDA loan is that you are required to pay an upfront and ongoing monthly mortgage insurance fee. These insurance fees are also referred to as guarantee fees. The one-time USDA guarantee fee is 1.0% of the loan amount and the ongoing fee is .35% of the loan amount. The good news for applicants is that mortgage insurance for the USDA Program is lower than for other programs including the FHA program and the monthly fee is usually lower than private mortgage insurance (PMI) for a conventional loan. The lower your mortgage insurance, the lower your closing costs and monthly housing payment, which makes the USDA Program more affordable compared to other programs. You can use our USDA Loan Calculator to determine the guarantee fees based on your mortgage amount.
Program Flexibility
The USDA Home Loan Program is more flexible than other no or low down payment mortgage programs in certain areas. For example, you can use a USDA loan to purchase land and build a home. Most similar mortgage programs cannot be used to buy vacant land or for construction loans. Other programs including the FHA and VA programs can only be used to purchase properties that are already built -- be it a new or existing home. Please note that if you use a USDA mortgage to build a home, you may be required to make a down payment to qualify. The greater flexibility of the program may appeal to people in rural areas who have identified a plot of land where they want to build a home. The USDA Home Loan Program offers them a low down payment option to finance both the land purchase and home construction.
The Program Can Be Used for Different Types of Homes
The USDA Home Loan program can be used to buy various types of properties including houses, condominiums, co-ops, land and even manufactured homes. As long as the manufactured home is attached to a permanent foundation it is eligible for the program. More types of properties are eligible for a USDA home loan as compared to other no or low down payment loans which makes the program applicable to more borrowers.
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More FREEandCLEAR Mortgage Resources
How a USDA Mortgage Works
Learn everything there is to know about the USDA Mortgage Program including applicant income limits, eligibility requirements and property location restrictions. Understand if you are eligible for a USDA mortgage based on your financial profile and where the home you want to buy is located.
USDA Mortgage Qualification Calculator
Calculate what size USDA home loan you qualify for based on your monthly gross income, debt expenses, current interest rates and other inputs. Determine how much home you can afford to buy with the USDA Home Loan Program.
Interest Rates
Use our lender tables to review interest rates and fees for leading lenders in your area. Shopping at least five lenders and comparing multiple mortgage quotes enables you to find the loan with the best terms including the lowest mortgage rate and closing costs.
Top No or Low Down Payment Programs
Compare the USDA Home Loan Program to over 20 other no and low down payment programs including government-backed and conventional options as well as custom programs offered by specific lenders. Understand your financing options and select the low down payment program that best meets your personal and financial goals. This resource is especially helpful if the home you want to buy is not located in a USDA-designated rural area.
Sources
"Chapter 16.4 Upfront Loan Guarantee Fee." Single Family Housing Guaranteed Loan Program Technical Handbook. U.S. Department of Agriculture, 2020. Web.
"Chapter 16.5 Annual Fee." Single Family Housing Guaranteed Loan Program Technical Handbook. U.S. Department of Agriculture, 2020. Web.