function calculateMortgage() {
// Get Input Values
var homePrice = parseFloat(document.getElementById('mcHomePrice').value);
var downPayment = parseFloat(document.getElementById('mcDownPayment').value);
var interestRate = parseFloat(document.getElementById('mcInterestRate').value);
var loanTermYears = parseInt(document.getElementById('mcLoanTerm').value);
var annualTax = parseFloat(document.getElementById('mcPropertyTax').value);
var annualInsurance = parseFloat(document.getElementById('mcInsurance').value);
var monthlyHOA = parseFloat(document.getElementById('mcHOA').value);
// Validation
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTermYears)) {
alert("Please enter valid numbers for Home Price, Down Payment, and Interest Rate.");
return;
}
// Handle optional fields being empty
if (isNaN(annualTax)) annualTax = 0;
if (isNaN(annualInsurance)) annualInsurance = 0;
if (isNaN(monthlyHOA)) monthlyHOA = 0;
// Loan Calculations
var loanAmount = homePrice – downPayment;
if (loanAmount <= 0) {
alert("Down payment cannot be greater than or equal to the home price.");
return;
}
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = loanTermYears * 12;
// Monthly Principal & Interest (Amortization Formula)
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyPrincipalInterest = 0;
if (interestRate === 0) {
monthlyPrincipalInterest = loanAmount / totalPayments;
} else {
monthlyPrincipalInterest = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
}
// Monthly Taxes and Insurance (Escrow)
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var totalMonthlyEscrow = monthlyTax + monthlyInsurance + monthlyHOA;
// Total Monthly Payment
var totalMonthlyPayment = monthlyPrincipalInterest + totalMonthlyEscrow;
// Total Loan Cost metrics
var totalCostOfLoan = (monthlyPrincipalInterest * totalPayments);
var totalInterestPaid = totalCostOfLoan – loanAmount;
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
// Display Results
document.getElementById('mcTotalMonthly').innerText = formatter.format(totalMonthlyPayment);
document.getElementById('mcPrincipalInterest').innerText = formatter.format(monthlyPrincipalInterest);
document.getElementById('mcTaxInsurance').innerText = formatter.format(totalMonthlyEscrow);
document.getElementById('mcTotalInterest').innerText = formatter.format(totalInterestPaid);
// Show result div
document.getElementById('mc-result').style.display = 'block';
}
How to Calculate Your Monthly Mortgage Payment
Understanding exactly how much house you can afford involves more than just looking at the sticker price. A comprehensive mortgage calculation includes the principal and interest, but also must account for "hidden" costs like property taxes, homeowner's insurance, and HOA fees. This calculator uses the PITI (Principal, Interest, Taxes, Insurance) model to give you a realistic monthly estimate.
What is PITI?
Mortgage lenders often use the acronym PITI to describe the four components of a monthly mortgage payment:
Principal: The money that goes directly toward paying down your loan balance.
Interest: The fee charged by the lender for borrowing the money. Early in your loan term, a significant portion of your payment goes toward interest.
Taxes: Property taxes assessed by your local government, typically held in an escrow account by your lender.
Insurance: Homeowners insurance to protect against damage, also usually paid via escrow.
How Interest Rates Affect Buying Power
Even a small change in interest rates can significantly impact your monthly payment and total loan cost. For example, on a $400,000 loan, the difference between a 6% and 7% interest rate is roughly $260 per month. Over the life of a 30-year loan, that single percentage point adds nearly $93,000 in interest payments.
The Impact of Loan Term Length
Choosing between a 15-year and a 30-year fixed mortgage is a balance between monthly affordability and total savings.
30-Year Term: Offers lower monthly payments, making expensive homes more affordable month-to-month, but you will pay significantly more interest over the life of the loan.
15-Year Term: Results in higher monthly payments, but you build equity much faster and can save tens of thousands of dollars in interest.
Don't Forget HOA Fees
If you are buying a condo, townhouse, or a home in a planned community, Homeowners Association (HOA) fees can drastically reduce your buying power. Lenders factor these mandatory fees into your debt-to-income ratio. An HOA fee of $300/month reduces your mortgage buying power by approximately $40,000 to $50,000 depending on current rates.
How to Use This Calculator
To get the most accurate result, try to find the specific property tax rate for the county you are looking to buy in (usually between 0.5% and 2.5% of home value). Input your expected down payment—remembering that anything under 20% usually triggers Private Mortgage Insurance (PMI), which lenders may add to your monthly costs until you reach 20% equity.