An online mortgage calculator is a great tool to help prospective home buyers estimate the cost of monthly mortgage payments. Because these online calculators are estimates and are not indicative of the exact mortgage rate and plan you'll qualify for, it's always best to speak with a professional mortgage counselor when purchasing a home to get concrete numbers.

Determine your balance or principal. This figure is how much of the house you'll actually be paying on. For example, if you're purchasing a $230,000 home, but have a $30,000 down payment, your principal is $200,000. Enter this figure into the "principal" or "mortgage" amount in the first box of the mortgage calculator.

Select how many years your loan will be amortized over. Typically, a home mortgage is amortized over 30 years. However, there are 40-year loans out now, and some loans can be amortized over a shorter time frame. If you're unsure, enter 30 years to be on the conservative side.

Enter your interest rate. Interest rates are posted daily on many mortgage company websites. However, because of the variety of mortgage plans available, not all plans and all interest rates are posted, just the most common ones. For a common estimate, enter the interest rates for a 30-year fixed mortgage, and understand that if you choose an adjustable-rate mortgage (ARM), your mortgage payment could initially be less than you calculated.

Press the "calculate" button. The calculator will give you your estimated monthly mortgage payment based on the information you provided.