Purchasing a home is one of the most significant financial decisions you will make in your lifetime. Our Mortgage Payment Calculator is designed to help you estimate your monthly payments accurately, ensuring you can budget effectively for your new property. By analyzing variables such as the home price, down payment, interest rate, and loan term, this tool provides a clear picture of your financial commitment.
How Mortgage Interest Works
The interest rate plays a pivotal role in determining your monthly payment and the total cost of your loan. A mortgage is typically an amortized loan, meaning your monthly payments are split between paying off the principal (the loan amount) and the interest. In the early years of a mortgage, a larger portion of your payment goes toward interest, while in later years, more is applied to the principal.
Even a small difference in interest rates—such as 0.5%—can result in saving or spending tens of thousands of dollars over the life of a 30-year loan.
Key Factors Affecting Your Payment
Home Price: The total sale price of the property.
Down Payment: The upfront cash you pay toward the home. A higher down payment reduces the loan amount and often secures a lower interest rate. Ideally, a down payment of 20% eliminates the need for Private Mortgage Insurance (PMI).
Loan Term: The duration of the loan. A 30-year term typically offers lower monthly payments but higher total interest costs compared to a 15-year term.
Interest Rate: The cost of borrowing money, expressed as a percentage. This is determined by your credit score and current market conditions.
Frequently Asked Questions
How much house can I afford?
Financial experts generally recommend that your monthly mortgage payment (including principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income. This ensures you have enough funds remaining for other expenses and savings.
What is Amortization?
Amortization is the process of spreading out a loan into a series of fixed payments over time. While the total payment amount remains the same each month, the ratio of principal to interest changes as the loan matures.
function calculateMortgage() {
// Get Input Values
var price = parseFloat(document.getElementById('homePrice').value);
var down = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseInt(document.getElementById('loanTerm').value);
// Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(years)) {
alert("Please enter valid numbers for all fields.");
return;
}
if (down >= price) {
alert("Down payment cannot be equal to or greater than the home price.");
return;
}
// Calculations
var principal = price – down;
var monthlyInterest = (rate / 100) / 12;
var numberOfPayments = years * 12;
var monthlyPayment = 0;
// Handle 0% interest edge case
if (rate === 0) {
monthlyPayment = principal / numberOfPayments;
} else {
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var x = Math.pow(1 + monthlyInterest, numberOfPayments);
monthlyPayment = (principal * x * monthlyInterest) / (x – 1);
}
var totalCost = monthlyPayment * numberOfPayments;
var totalInterest = totalCost – principal;
// Calculate Payoff Date
var today = new Date();
var payoffDate = new Date(today.setMonth(today.getMonth() + numberOfPayments));
var payoffString = payoffDate.toLocaleString('default', { month: 'long', year: 'numeric' });
// Update UI
document.getElementById('monthlyPaymentDisplay').innerHTML = "$" + monthlyPayment.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('loanAmountDisplay').innerHTML = "$" + principal.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalInterestDisplay').innerHTML = "$" + totalInterest.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalCostDisplay').innerHTML = "$" + totalCost.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('payoffDateDisplay').innerHTML = payoffString;
// Show Result Section
document.getElementById('resultSection').style.display = "block";
}