A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial. This calculator helps demystify the process by estimating your principal and interest payment based on the loan amount, interest rate, and loan term.
The Math Behind Your Mortgage Payment
The standard formula used to calculate a fixed-rate mortgage payment (Principal & Interest) is as follows:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (the amount you borrowed)
i = Your monthly interest rate. This is your annual interest rate divided by 12 (e.g., if your annual rate is 5%, your monthly rate is 0.05 / 12 = 0.004167).
n = The total number of payments over the loan's lifetime. This is your loan term in years multiplied by 12 (e.g., a 30-year mortgage has 30 * 12 = 360 payments).
How to Use This Calculator
Principal Loan Amount: Enter the total amount of money you are borrowing to purchase your home. This is the price of the home minus your down payment.
Annual Interest Rate (%): Input the yearly interest rate for your mortgage. This is usually expressed as a percentage (e.g., 4.5%, 6%).
Loan Term (Years): Specify how many years you plan to take to repay the loan (e.g., 15, 20, 30 years).
Clicking "Calculate Payment" will provide an estimated monthly payment for the principal and interest portion of your mortgage. Remember that your actual total monthly housing expense will likely include other costs such as property taxes, homeowner's insurance, and potentially Private Mortgage Insurance (PMI) or Homeowner Association (HOA) fees.
Example Calculation
Let's say you are taking out a mortgage with the following details:
Principal Loan Amount (P): $300,000
Annual Interest Rate: 6.5%
Loan Term: 30 Years
First, we convert the annual interest rate to a monthly rate (i):
i = 6.5% / 12 = 0.065 / 12 ≈ 0.0054167
Next, we calculate the total number of payments (n):
n = 30 years * 12 months/year = 360 payments
Therefore, the estimated monthly payment for principal and interest would be approximately $1,896.19. This calculator will perform these calculations for you instantly.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultValue = document.getElementById("result-value");
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) ||
loanAmount <= 0 || annualInterestRate < 0 || loanTermYears <= 0) {
resultValue.textContent = "Invalid input";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
resultValue.textContent = "Error calculating";
} else {
resultValue.textContent = "$" + monthlyPayment.toFixed(2);
}
}