A 15-year mortgage is a popular home loan option that allows you to pay off your home faster compared to a traditional 30-year mortgage. This means you'll pay less interest over the life of the loan, build equity more quickly, and achieve homeownership freedom sooner. However, the trade-off is typically higher monthly payments due to the shorter repayment period.
How the Calculation Works
The monthly payment for a mortgage is calculated using a standard amortization formula. For a 15-year mortgage, the principal and interest payment is determined by the following factors:
Loan Amount (P): The total amount of money borrowed to purchase the home.
Annual Interest Rate (r): The yearly interest rate charged by the lender. This is converted to a monthly rate for the calculation.
Loan Term (n): The total number of months over which the loan will be repaid. For a 15-year mortgage, this is 15 years * 12 months/year = 180 months.
The formula used is:
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
i = Your monthly interest rate (annual rate divided by 12)
n = The total number of payments over the loan's lifetime (180 for a 15-year mortgage)
Our calculator simplifies this for you. Simply enter the loan amount and the annual interest rate, and it will compute your estimated monthly principal and interest payment.
Benefits of a 15-Year Mortgage
Faster Equity Building: You'll own your home free and clear much sooner.
Lower Total Interest Paid: Significantly reduces the total interest you pay over the loan's life.
Increased Financial Freedom: Once the mortgage is paid off, you have more disposable income.
Potentially Lower Interest Rate: Lenders may offer slightly lower rates for shorter-term loans.
Considerations for a 15-Year Mortgage
Higher Monthly Payments: The principal is paid back over half the time, leading to larger monthly installments. Ensure your budget can comfortably accommodate this.
Less Flexibility: A higher payment can reduce your monthly cash flow for other expenses or savings.
This calculator provides an estimate of the principal and interest portion of your monthly mortgage payment. It does not include other costs such as property taxes, homeowners insurance, or private mortgage insurance (PMI), which will increase your total monthly housing expense.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = 15;
var numberOfPayments = loanTermYears * 12;
var monthlyPaymentElement = document.getElementById("monthlyPayment");
if (isNaN(loanAmount) || isNaN(interestRate) || loanAmount <= 0 || interestRate < 0) {
monthlyPaymentElement.textContent = "Please enter valid numbers.";
return;
}
var monthlyInterestRate = interestRate / 100 / 12;
var numerator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
if (denominator === 0) { // Handle cases where rate is 0%
var monthlyPayment = loanAmount / numberOfPayments;
} else {
var monthlyPayment = loanAmount * (numerator / denominator);
}
monthlyPaymentElement.textContent = "$" + monthlyPayment.toFixed(2);
}