Auto Refinance Lowest Rates Calculator

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Mortgage Payment Calculator

function calculateMortgage() { var loanAmount = parseFloat(document.getElementById("loanAmount").value); var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value); var loanTermYears = parseFloat(document.getElementById("loanTermYears").value); if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || loanAmount <= 0 || annualInterestRate < 0 || loanTermYears <= 0) { document.getElementById("result").innerHTML = "Please enter valid positive numbers for all fields."; return; } var monthlyInterestRate = annualInterestRate / 100 / 12; var numberOfMonths = loanTermYears * 12; var monthlyPayment; if (monthlyInterestRate === 0) { monthlyPayment = loanAmount / numberOfMonths; } else { monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfMonths)) / (Math.pow(1 + monthlyInterestRate, numberOfMonths) – 1); } document.getElementById("result").innerHTML = "Your estimated monthly mortgage payment is: $" + monthlyPayment.toFixed(2); }

Understanding Your Mortgage Payment

A mortgage is a loan used to purchase real estate, typically a home. The monthly mortgage payment is a crucial figure for any prospective homeowner, as it represents a significant and ongoing financial commitment. This payment is primarily composed of two parts: principal and interest.

Principal is the amount of money you borrowed to buy the property. Each month, a portion of your payment goes towards reducing this outstanding balance.

Interest is the cost of borrowing the money. Lenders charge interest as compensation for the risk they take by lending you the funds. Initially, a larger portion of your monthly payment goes towards interest, but as you pay down the principal, the interest portion decreases over time.

The formula used in this calculator is the standard mortgage payment formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Where:

  • M = Your total monthly mortgage payment
  • 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 (loan term in years multiplied by 12)

This calculator helps you estimate your principal and interest (P&I) payment. Remember that your actual total monthly housing cost may also include property taxes, homeowner's insurance, and potentially Private Mortgage Insurance (PMI) or Homeowner Association (HOA) fees, which are not included in this basic calculation. Understanding these components can help you budget more effectively and make informed decisions about your homeownership journey.

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