Calculating your monthly home loan payment (also known as Principal and Interest or P&I) is crucial for budgeting and financial planning. This calculator uses a standard formula to estimate your P&I payment based on three key factors: the loan amount, the annual interest rate, and the loan term.
The Formula
The most common formula used for calculating monthly mortgage payments is the annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (the amount you borrow)
i = Your monthly interest rate (your annual interest rate divided by 12)
n = The total number of payments over the loan's lifetime (your loan term in years multiplied by 12)
How the Calculator Works
1. Loan Amount (P): This is the total sum of money you are borrowing to purchase your home.
2. Annual Interest Rate: This is the yearly percentage charged by the lender. The calculator converts this to a monthly rate by dividing it by 12. For example, a 6% annual rate becomes 0.5% (or 0.005) per month.
3. Loan Term (Years): This is the duration over which you agree to repay the loan. The calculator converts this into the total number of monthly payments by multiplying the years by 12. A 30-year mortgage means 360 payments.
The calculator then plugs these values into the formula to derive your estimated monthly P&I payment.
Important Considerations
This calculator provides an estimate for the Principal and Interest portion of your monthly mortgage payment. Your actual total monthly housing expense will likely be higher and may include:
Property Taxes: Paid to your local government.
Homeowner's Insurance: Required by lenders to protect against damage.
Private Mortgage Insurance (PMI): Often required if your down payment is less than 20%.
Homeowner Association (HOA) Fees: If you live in a community with an HOA.
Always consult with a mortgage professional for a precise loan estimate and to understand all the costs associated with your home purchase.
function calculateMonthlyPayment() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var monthlyPaymentElement = document.getElementById("monthlyPayment");
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(interestRate) || interestRate < 0 ||
isNaN(loanTerm) || loanTerm 0) {
// Standard mortgage payment formula
var numerator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
monthlyPayment = loanAmount * (numerator / denominator);
} else {
// If interest rate is 0%, payment is simply principal divided by number of payments
monthlyPayment = loanAmount / numberOfPayments;
}
monthlyPaymentElement.textContent = "$" + monthlyPayment.toFixed(2);
}