function calculateMortgage() {
var loanAmountInput = document.getElementById("loanAmount");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var loanAmount = parseFloat(loanAmountInput.value);
var annualInterestRate = parseFloat(interestRateInput.value);
var loanTermYears = parseInt(loanTermInput.value);
var resultDiv = document.getElementById("mortgageResult").getElementsByTagName("span");
// Clear previous results and show default state if inputs are invalid
for (var i = 0; i < resultDiv.length; i++) {
resultDiv[i].textContent = "$0.00";
}
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please enter valid numbers for Loan Amount, Interest Rate, and Loan Term.");
return;
}
var monthlyInterestRate = (annualInterestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = 0;
var totalPrincipal = loanAmount;
var totalInterestPaid = 0;
var totalRepayment = 0;
if (monthlyInterestRate === 0) { // Handle 0% interest rate case
monthlyPayment = loanAmount / numberOfPayments;
} else {
// Standard mortgage payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
totalRepayment = monthlyPayment * numberOfPayments;
totalInterestPaid = totalRepayment – loanAmount;
// Format currency
var formatCurrency = function(amount) {
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
};
document.getElementById("mortgageResult").getElementsByTagName("span")[0].textContent = formatCurrency(monthlyPayment);
document.getElementById("mortgageResult").getElementsByTagName("span")[1].textContent = formatCurrency(totalPrincipal);
document.getElementById("mortgageResult").getElementsByTagName("span")[2].textContent = formatCurrency(totalInterestPaid);
document.getElementById("mortgageResult").getElementsByTagName("span")[3].textContent = formatCurrency(totalRepayment);
}
Understanding Your Mortgage Payment
Purchasing a home is a significant financial milestone, and understanding the components of your mortgage payment is crucial for making informed decisions. A mortgage is a loan used to finance the purchase of real estate, and it's typically paid back over a long period, often 15 to 30 years. The primary component of your monthly mortgage payment is the principal and interest (P&I).
The Mortgage Payment Formula
The monthly payment for a mortgage is calculated using a standard formula based on the loan amount, the interest rate, and the loan term. The formula is designed to ensure that over the life of the loan, the lender receives back the principal amount borrowed plus the agreed-upon interest.
The formula for calculating the monthly mortgage payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal & Interest)
P = The loan amount (the principal amount of the loan)
i = Your monthly interest rate (your annual interest rate divided by 12)
n = The total number of monthly payments over the loan's lifetime (your loan term in years multiplied by 12)
How the Calculator Works
Our Mortgage Payment Calculator simplifies this complex calculation. You input the total amount you wish to borrow (Loan Amount), the annual interest rate you've been offered (Annual Interest Rate), and the number of years you plan to repay the loan (Loan Term (Years)). The calculator then applies the formula to estimate your monthly principal and interest payment. It also shows the total amount of interest you'll pay over the life of the loan and the total amount you'll repay.
Example Calculation
Let's consider an example:
Loan Amount (P): $300,000
Annual Interest Rate: 5.0%
Loan Term (Years): 30 years
First, we convert the annual interest rate to a monthly interest rate (i):
i = 5.0% / 12 = 0.05 / 12 ≈ 0.00416667
Next, we calculate the total number of payments (n):
n = 30 years * 12 months/year = 360 months
Now, we plug these values into the formula:
M = 300000 [ 0.00416667(1 + 0.00416667)^360 ] / [ (1 + 0.00416667)^360 – 1]
This calculation results in an estimated monthly payment of approximately $1,610.46.
Over 30 years, you would make 360 payments of $1,610.46, totaling approximately $579,765.60. This means the total interest paid would be around $279,765.60 ($579,765.60 – $300,000).
Important Considerations
Keep in mind that this calculator provides an estimate for the principal and interest portion of your mortgage payment. Your actual monthly payment may be higher as it often includes other costs such as property taxes, homeowners insurance, and potentially private mortgage insurance (PMI) or homeowners association (HOA) fees. These additional costs are often referred to as PITI (Principal, Interest, Taxes, and Insurance).
Using this calculator can help you budget effectively and understand the financial commitment involved in taking out a mortgage.