Foreign National Mortgage Calculator: Calculate Monthly Loan Payments

Because foreign national mortgage loans are US-based mortgages, all the calculations are done in US dollars.

Due to globalization and various economic factors, more and more people are looking outside of their native countries for investment opportunities. Some don’t have enough cash on hand to cover the costs of those investments outright, so they turn to international mortgage lenders to finance their overseas property. 

These loans for overseas properties are easy to get, especially in the US (because of the highly developed financial system). That leads us, and you as a potential investor, to an important question: How do you calculate your monthly loan payments?

Calculating your monthly payments for a foreign national mortgage can be complicated. Luckily for you, we’ve dealt with all of the complicated math and have made an easy-to-use overseas mortgage calculator. With NRI’s overseas mortgage calculator, you can determine your loan monthly payments in seconds. All you have to do is input the right information, and you’ll get your answer immediately. 

For those interested in learning about the math behind the foreign national mortgage calculator, we’ve prepared a detailed explanation of how to manually calculate the monthly loan payments. 

But first, let’s give you some info about foreign national mortgages, just to make sure we’re all on the same page. 

What Is a Foreign National Mortgage? 

Foreign national mortgage loans are non-QM loans designed to help nonresidents finance properties in the US. Like other non-QM loans, these ones are meant to help foreigners who don’t meet the requirements for conventional mortgage loans purchase US property. 

Because these types of loans are much easier to qualify for, lenders will usually ask for a higher down payment (when compared to qualified mortgages). In most cases, the foreign national mortgage loan down payment will be between 20% and 25% of the property’s value. 

Check out the linked article to learn more about the difference between non-qualified mortgages and regular loans.

Now, without further ado, let’s move to the foreign national mortgage calculator, which is the main reason why you came here. 

Overseas Mortgage Calculator: How to Manually Calculate Monthly Loan Payments

Calculating monthly loan payments for a foreign national mortgage can get tricky, especially if you do it manually. Even though it’s a standard formula used worldwide for many different types of loans, it still can pose problems to many people.   

That’s why, to make it as easy as possible to understand, we’re decided to break down the whole process into four easy steps:

1. What Are the Numbers?

Before we start calculating the monthly payments for a foreign national mortgage, we need to have some numbers. The first number we need to start with is the value of the property you’re interested in financing with a foreign national mortgage loan. 

Let’s say that, for our example, you’re looking at a house that’s worth $300,000. With a down payment of 25%, the loan amount is going to be $225,000. Apart from the loan amount (P), we’ll also need a couple of other metrics to get our calculation going:

• t or term length; Let’s put it at 30 years for this example
• r or interest rate; Let’s put it at 7% for this example

So far, we got that:

P = $225,000

t = 30 years

r = 7%

With those numbers in mind, let’s move on to the formula and show you what it looks like.

2. Start With the Formula 

The standard formula for calculating foreign national mortgage monthly payments goes as follows:

MP=P rn1-1+rn-nt  

MP represents the monthly payments and is the number we’re looking to calculate. 

We know it looks complicated, but it really isn’t once you break everything down. We promised to do that, so don’t give up just yet. Let’s first deal with the numerator (or the top part of the fraction)

3. The Top Part 

This is what we’re going to calculate first:

P rn 

But before we do that, we need to figure out what numbers we should put in instead of the variables (the letters). We know that 

• P (loan amount) is $225,000. 
• r (interest) is 7%  or 0,07 in numerals 
• n is the number of payments in a single year, and it equals 12

Now, let’s put the numbers in a see what we get:

225,000 0,0712= 225,000 [0,00583333]= 1312,49925 

We’ve completed the top part of the fraction, and we got our number — 1312,49925. Now, it’s time to move on to the denominator or, simply, the bottom part of the fraction.

3. The Bottom Part

The bottom does look a bit more complicated, but don’t worry, we’ve got you covered here as well. 

1-1+rn-nt

Just like with the top part, first, we just need to exchange the variables with the actual number values. In our case, those numbers are:

• r (interest) is 7%  or 0,07 in numerals 
• n is the number of payments in a single year, and it equals 12
• t is the term length, and in our case, it’s 30 years

Once we put the numbers in, we’ll get the following:

1-1+0,0712-30×12 = 1-1,00583333333-360 = 0,87679399937

We have the top and bottom parts, so let’s combine them to get our final answer.

4. Finally, We Can Calculate the Monthly Payment

MP=1312,499250,87679399937= 1496,93000972   

The amount of money you’ll need to have for monthly payments for a loan of $225,000 with a 30-year term is $1496,93.  

International Mortgage Rates: Examples

We’ll share a couple of short examples to ensure you fully understand the math behind the above overseas mortgage calculator.

Foreign National Mortgage Calculator: Example 1 

John is a Canadian investor interested in buying a property in Florida worth $450,000. With a downpayment of 25%, the loan amount will be $337,500. A foreign national mortgage lender is offering John a rate of 7.5%, and the loan term is 25 years. 

With those numbers, our variables will look something like this:

P = $337,500

t = 25 years

r = 7,5% = 0,075

n = 12

And let’s not forget the universal formula for calculating monthly loan payments::

MP=P rn1-1+rn-nt

Now, all that’s left is to input the numbers into to formula and calculate John’s monthly payments. 

MP=2109,3750,84574757965= 2494,09522505

John will need to pay $2,495 per month to cover the monthly payments and purchase a property in Florida.

Foreign National Mortgage Calculator: Example 2

After studying the statistics about foreign investment in US real estate, Zhang Wei, an investor from China, realized that many of his countrymen are purchasing homes in the US. That prompted Zhang Wei to start looking at US homes until he finally found one in Texas. 

The property Mr. Wei is interested in has an asking price of $550,000. Because he is eligible to get a foreign national mortgage loan, he only needs to cover the down payment upfront, while the rest of the money for the house will come from a lender. The down payment is 25%, which means his loan amount is $416,250. The loan term is 30 years, and the interest rate is 7%. 

Let’s break that down into variables:

P = $416,250

t = 30 years

r = 7% = 0,07

n = 12

Now, let’s put all of those into our foreign national mortgage calculator formula, which we should all be familiar with. But, in case you’ve missed it, here it is again:

MP=P rn1-1+rn-nt

It’s time to put in our numbers for this example and calculate the monthly payments:

MP=2428,1250,87679414636= 2769,32173639

With the calculation out of the way, we learned that Zhang Wei will need to pay around $2,769 per month to cover the cost of the foreign national mortgage loan.

Foreign National Mortgage Calculator: Example 3

Aaban Patel is an Indian citizen looking to purchase property in the States. After looking at the average house cost in the US, he found a property in Texas worth $350,000. Because he’s eligible to get a foreign national mortgage, he only needs to have enough cash to cover the down payment. In this case, at the rate of 25% of the property’s value, the down payment is going to be $87,500, with the loan amount being $262,500. The loan term he went for is 25 years, and the interest rate is set at 8%.

P = $262,500.

t = 25 years

r = 8% = 0,08

n = 12

Let’s add those numbers to the foreign national mortgage calculator formula to determine what Pate’s monthly payments are going to be:

MP=P rn1-1+rn-nt

MP=1,7500,8633763484= 2026,92603665

To fully pay off his mortgage, Aaban will need around $2,027 per month.

Main Types of Foreign National Mortgage Loans 

There are many different types of foreign national mortgage loans, with the most popular of them being:

• DSCR loans
• ITIN mortgage loans
• Nonresident mortgage loans 
• Hard money loans
• Portfolio loans