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Understanding Your Mortgage Payment

A mortgage is a loan used to purchase a home. Typically, it's a large sum of money borrowed from a bank or lender, which you then repay over a long period (often 15, 20, or 30 years) with interest. The monthly payment you make towards your mortgage usually includes not just the principal (the original amount borrowed) but also interest, property taxes, and homeowner's insurance, often referred to as PITI.

Key Components of a Mortgage Payment:

  • Principal: The portion of your payment that goes towards reducing the actual amount you owe on the loan.
  • Interest: The cost of borrowing the money, charged by the lender.
  • Property Taxes: Funds collected by your lender and paid to your local government to cover property tax obligations.
  • Homeowner's Insurance: Premiums for insurance that protects your home against damage and liability, also collected by the lender.

How the Mortgage Payment Calculator Works:

Our mortgage calculator helps you estimate your potential monthly mortgage payment. You'll need to input the following details:

  • Loan Amount: The total amount of money you are borrowing for the home.
  • Annual Interest Rate: The yearly interest rate charged by the lender, expressed as a percentage.
  • Loan Term (Years): The total number of years you have to repay the loan.
  • Estimated Annual Property Taxes: The total amount you expect to pay in property taxes annually.
  • Estimated Annual Homeowner's Insurance: The total amount you expect to pay for homeowner's insurance annually.

The calculator uses the standard mortgage payment formula to determine the principal and interest portion of your payment. It then adds your estimated annual property taxes and homeowner's insurance, divided by 12, to give you a more complete picture of your likely monthly housing expense.

The Mortgage Payment Formula (Principal & Interest):

The formula used to calculate the principal and interest portion of a mortgage payment 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 (loan term in years multiplied by 12)

Calculate Your Mortgage Payment

var calculateMortgage = function() { var loanAmountInput = document.getElementById("loanAmount"); var annualInterestRateInput = document.getElementById("annualInterestRate"); var loanTermYearsInput = document.getElementById("loanTermYears"); var annualPropertyTaxesInput = document.getElementById("annualPropertyTaxes"); var annualHomeownersInsuranceInput = document.getElementById("annualHomeownersInsurance"); var resultDiv = document.getElementById("mortgage-result"); var loanAmount = parseFloat(loanAmountInput.value); var annualInterestRate = parseFloat(annualInterestRateInput.value); var loanTermYears = parseFloat(loanTermYearsInput.value); var annualPropertyTaxes = parseFloat(annualPropertyTaxesInput.value); var annualHomeownersInsurance = parseFloat(annualHomeownersInsuranceInput.value); if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || loanAmount <= 0 || annualInterestRate < 0 || loanTermYears <= 0) { resultDiv.innerHTML = "Please enter valid numbers for Loan Amount, Annual Interest Rate, and Loan Term."; return; } if (isNaN(annualPropertyTaxes) || annualPropertyTaxes < 0) { annualPropertyTaxes = 0; // Default to 0 if not a valid positive number } if (isNaN(annualHomeownersInsurance) || annualHomeownersInsurance 0) { principalAndInterestPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1); } else { // Handle case of 0% interest rate principalAndInterestPayment = loanAmount / numberOfPayments; } var monthlyPropertyTaxes = annualPropertyTaxes / 12; var monthlyHomeownersInsurance = annualHomeownersInsurance / 12; var totalMonthlyPayment = principalAndInterestPayment + monthlyPropertyTaxes + monthlyHomeownersInsurance; resultDiv.innerHTML = "Estimated Total Monthly Payment (PITI): $" + totalMonthlyPayment.toFixed(2); };

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