Based on your inputs, your principal and interest payment will be approximately:
Understanding Your Mortgage Payment
A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial for budgeting and financial planning. This calculator helps demystify the process by providing an estimate of your principal and interest payment.
The Mortgage Payment Formula
The standard formula used to calculate the monthly payment (M) for a fixed-rate mortgage is derived from the annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (principal and interest)
P = The principal loan amount (the total amount you borrow)
i = Your monthly interest rate. This is your annual interest rate divided by 12. For example, if your annual rate is 4.5%, your monthly rate is 4.5% / 12 = 0.375% or 0.00375.
n = The total number of payments over the loan's lifetime. This is your loan term in years multiplied by 12. For a 30-year mortgage, n = 30 * 12 = 360 payments.
How the Calculator Works
This calculator takes the following inputs:
Loan Amount ($): The total sum of money you are borrowing to purchase your property.
Annual Interest Rate (%): The yearly percentage charged by the lender on the borrowed amount.
Loan Term (Years): The total duration of the loan, usually expressed in years (e.g., 15, 30).
It then applies the mortgage payment formula described above. First, it converts the annual interest rate into a monthly rate by dividing by 12. Second, it calculates the total number of monthly payments by multiplying the loan term in years by 12. Finally, it plugs these values, along with the loan amount, into the formula to compute the estimated monthly principal and interest payment.
Important Considerations
Please note that the monthly payment calculated by this tool is an estimate of the principal and interest (P&I) portion of your mortgage payment only. Your actual total monthly housing expense will likely be higher and may include:
Property Taxes: Annual taxes assessed by your local government on your property.
Homeowner's Insurance: Insurance to protect your home against damage.
Private Mortgage Insurance (PMI): Required by lenders if your down payment is less than 20% of the home's purchase price.
Homeowners Association (HOA) Fees: Dues for living in a community with shared amenities and services.
It is always recommended to consult with a qualified mortgage professional or financial advisor for a comprehensive understanding of all costs associated with obtaining a mortgage and purchasing a home.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var monthlyPaymentDisplay = document.querySelector(".result-display .monthly-payment");
if (isNaN(loanAmount) || isNaN(interestRate) || isNaN(loanTerm) || loanAmount <= 0 || interestRate < 0 || loanTerm 0) {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// Handle zero interest rate case to avoid division by zero in formula
monthlyPayment = loanAmount / numberOfPayments;
}
// Format the monthly payment to two decimal places
var formattedMonthlyPayment = "$" + monthlyPayment.toFixed(2);
monthlyPaymentDisplay.textContent = formattedMonthlyPayment;
}