Buying a house is one of the largest financial commitments most people will make. Understanding how your monthly mortgage payment is calculated is crucial for budgeting and making informed decisions. This calculator helps you estimate your Principal & Interest (P&I) payment, a core component of your total housing cost.
The Math Behind the Payment
The monthly mortgage payment is calculated using a standard annuity formula. The primary components are the loan amount (principal), the interest rate, and the loan term. The formula for the monthly payment (M) is:
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (the amount you borrow)
i = Your monthly interest rate. This is calculated by dividing your annual interest rate by 12 (e.g., if your annual rate is 3.5%, your monthly rate is 0.035 / 12).
n = The total number of payments over the loan's lifetime. This is calculated by multiplying the loan term in years by 12 (e.g., a 30-year loan has 30 * 12 = 360 payments).
How to Use This Calculator
1. Loan Amount (Principal): Enter the total amount you plan to borrow for the house. This is typically the purchase price minus your down payment.
2. Annual Interest Rate (%): Input the yearly interest rate offered by your lender. Use the slider or type the percentage directly.
3. Loan Term (Years): Specify the duration of the loan in years. Common terms are 15, 20, or 30 years.
Click "Calculate Payment" to see your estimated monthly Principal & Interest payment. The results update dynamically.
What's Included and What's Not
This calculator provides an estimate for the Principal and Interest (P&I) portion of your mortgage payment. Your actual total monthly housing expense will likely be higher and may include:
Property Taxes: Annual taxes on your property, often collected by the lender and paid to the local government.
Homeowner's Insurance: Coverage for damage to your home.
Private Mortgage Insurance (PMI): Required if your down payment is less than 20% of the home's value.
Homeowner Association (HOA) Fees: If applicable, for community amenities and maintenance.
These additional costs are often bundled into your mortgage payment and held in an escrow account by your lender. Always consult with your lender for a precise breakdown of your total monthly obligation.
Why This Matters
Understanding your mortgage payment helps you:
Budget Effectively: Know how much disposable income you'll have left after housing costs.
Shop for Loans: Compare offers from different lenders based on interest rates and terms.
Affordability Assessment: Determine if a particular home price fits within your financial means.
Use this calculator as a starting point to estimate your potential house payments.
function calculateMonthlyPayment() {
var principal = parseFloat(document.getElementById("principal").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTerm").value);
var monthlyPaymentElement = document.getElementById("monthlyPayment");
// Input validation
if (isNaN(principal) || principal <= 0) {
monthlyPaymentElement.textContent = "Invalid Loan Amount";
return;
}
if (isNaN(annualInterestRate) || annualInterestRate <= 0) {
monthlyPaymentElement.textContent = "Invalid Interest Rate";
return;
}
if (isNaN(loanTermYears) || loanTermYears 0) {
monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// Handle case where interest rate is 0 (though unlikely for mortgages)
monthlyPayment = principal / numberOfPayments;
}
// Format the result to two decimal places
monthlyPaymentElement.textContent = "$" + monthlyPayment.toFixed(2);
}