A mortgage is a type of loan used to purchase real estate, where the property itself serves as collateral for the lender. The monthly mortgage payment is a crucial figure for any homeowner, as it represents the ongoing cost of financing your home.
The standard mortgage payment calculation determines a fixed amount you pay each month over the life of the loan. This payment typically includes two main components: principal and interest.
Principal: This is the amount of money you borrowed to buy your home. Each month, a portion of your payment goes towards reducing this outstanding loan balance.
Interest: This is the cost of borrowing the money. The lender charges you interest based on the outstanding loan amount and the agreed-upon interest rate.
Over the life of a typical mortgage (e.g., 15 or 30 years), a larger portion of your early payments goes towards interest, while later payments focus more on principal.
The Formula Explained
The most common formula used to calculate the monthly mortgage payment (M) is the annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount (the amount you borrow)
i = Monthly interest rate (annual interest rate divided by 12)
n = Total number of payments (loan term in years multiplied by 12)
Our calculator uses this formula to provide an accurate estimate of your monthly mortgage payment, along with the total interest paid and total repayment amount over the loan's lifetime. Factors like property taxes, homeowner's insurance, and private mortgage insurance (PMI) are not included in this basic calculation and would increase your actual total monthly housing expense.
function calculateMortgagePayment() {
var loanAmountInput = document.getElementById("loanAmount");
var annualInterestRateInput = document.getElementById("annualInterestRate");
var loanTermYearsInput = document.getElementById("loanTermYears");
var loanAmountError = document.getElementById("loanAmountError");
var annualInterestRateError = document.getElementById("annualInterestRateError");
var loanTermYearsError = document.getElementById("loanTermYearsError");
// Clear previous errors
loanAmountError.innerHTML = "";
annualInterestRateError.innerHTML = "";
loanTermYearsError.innerHTML = "";
var loanAmount = parseFloat(loanAmountInput.value);
var annualInterestRate = parseFloat(annualInterestRateInput.value);
var loanTermYears = parseFloat(loanTermYearsInput.value);
var isValid = true;
if (isNaN(loanAmount) || loanAmount <= 0) {
loanAmountError.innerHTML = "Please enter a valid loan amount.";
isValid = false;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
annualInterestRateError.innerHTML = "Please enter a valid annual interest rate.";
isValid = false;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
loanTermYearsError.innerHTML = "Please enter a valid loan term in years.";
isValid = false;
}
if (!isValid) {
document.getElementById("monthlyPaymentResult").innerHTML = "$0.00";
document.getElementById("totalInterestResult").innerHTML = "Total Interest Paid: $0.00";
document.getElementById("totalRepaymentResult").innerHTML = "Total Repayment: $0.00";
return;
}
// Calculate monthly interest rate
var monthlyInterestRate = (annualInterestRate / 100) / 12;
// Calculate total number of payments
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = 0;
var totalInterestPaid = 0;
var totalRepayment = 0;
// Mortgage payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
if (monthlyInterestRate === 0) {
// Handle case with 0 interest rate
monthlyPayment = loanAmount / numberOfPayments;
} else {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
totalRepayment = monthlyPayment * numberOfPayments;
totalInterestPaid = totalRepayment – loanAmount;
document.getElementById("monthlyPaymentResult").innerHTML = "$" + monthlyPayment.toFixed(2);
document.getElementById("totalInterestResult").innerHTML = "Total Interest Paid: $" + totalInterestPaid.toFixed(2);
document.getElementById("totalRepaymentResult").innerHTML = "Total Repayment: $" + totalRepayment.toFixed(2);
}