How do I use the real estate calculator?

Use the free app above to calculate ROI on any type of real estate. Explore the tabs for more charts and tables that support your input.

Reshape the equation at the top by clicking Edit Formula. The results are shareable! Link directly to the tool results anywhere online.

Explore more recent winners and losers from the Investments tab. Clicking on any asset will send it to the interactive calculator.

Definitions

Adjustable-Rate

Adjustable-rate mortgages (ARMs) typically begin with a lower interest rate than fixed-rate mortgages, but change over time. This tends to be more advantageous in the short-term than the long-term.

Amortization

An amortization schedule details how a loan’s principal and interest balances are paid over time opposed to one another. When paying down a loan, it’s common for interest to get paid before principal.

Broker

A real estate broker is someone that has passed the broker’s license exam. This means that they’ve received education that goes above and beyond what’s required of real estate agents in a particular state. This includes topics such as construction, legal, and property management. Your real estate agent will be required to work under the supervision of a licensed broker.

Buydown

A buydown occurs when the borrower pays a premium, called a “point,” to reduce the interest rate of their loan. It’s often worth comparing how a buydown might impact your interest rate as compared to alternative investments for your capital.

Earnest Money

Earnest money is a good faith deposit that is part of your downpayment. It gets paid prior to closing to demonstrate your seriousness about a particular real estate purchase.

Escrow

Escrow is an arrangement in which a third party holds funds or documents for the purposes of a contract until certain conditions are met. In real estate, you can set up an escrow account for your mortgage payments to be held throughout the term of the loan.

FHA Loan

The Federal Housing Administration (FHA) provides mortgage insurance to make home ownership possible for people with limited resources. These loans are especially relevant to first-time home buyers. FHA loans often have lower requirements and costs.

Fixed Rate

A fixed-rate mortgage guarantees a single interest rate for the duration of your loan. With this type of mortgage, your monthly principal and interest payment never changes.

Mortgage

A mortgage is a loan used to purchase or refinance a home. It may also refer to the legal document that pledges a particular property as collateral for a loan.

Jumbo Loan

The government-sponsored corporations of Fannie Mae and Freddie Mac set conventional loan limits annually in January. Loans that exceed these sizes are called jumbo loans.

REALTOR®

REALTOR® describes any agent that is also a National Association of REALTORS® member.

Underwriting

Underwriting involves the assumption of risk by an individual or institution. This risk most commonly involves loans, insurance policies, and investments.

Updated July 12th, 2023 at 09:03 am by Henry Casey. Reviewed by Corey Northcutt.