function calculateMortgage() {
// Get input values
var price = parseFloat(document.getElementById('homePrice').value);
var down = parseFloat(document.getElementById('downPayment').value);
var term = parseInt(document.getElementById('loanTerm').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var errorDiv = document.getElementById('errorMsg');
var resultsDiv = document.getElementById('results');
// Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || price <= 0 || rate < 0 || down = price) {
errorDiv.innerText = "Down payment cannot be greater than or equal to home price.";
errorDiv.style.display = 'block';
resultsDiv.style.display = 'none';
return;
}
errorDiv.style.display = 'none';
// Calculations
var principal = price – down;
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
var monthlyPayment = 0;
// Handle 0% interest edge case
if (rate === 0) {
monthlyPayment = principal / numPayments;
} else {
// Standard Mortgage Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
var totalPayment = monthlyPayment * numPayments;
var totalInterest = totalPayment – principal;
// Update UI
document.getElementById('monthlyPayment').innerText = formatCurrency(monthlyPayment);
document.getElementById('loanAmount').innerText = formatCurrency(principal);
document.getElementById('totalInterest').innerText = formatCurrency(totalInterest);
document.getElementById('totalCost').innerText = formatCurrency(totalPayment);
resultsDiv.style.display = 'block';
}
function formatCurrency(num) {
return '$' + num.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 });
}
Understanding Mortgage Calculations
Purchasing a home is one of the most significant financial decisions you will make in your lifetime. Understanding how your monthly mortgage payment is calculated is crucial for budgeting and financial planning. Our Mortgage Calculator helps you estimate your monthly financial commitment based on the home price, your down payment, the loan term, and the interest rate.
How the Formula Works
A standard mortgage payment is comprised of two main parts: Principal and Interest (often abbreviated as P&I). The formula used to determine your monthly payment is based on amortization, which spreads out the cost of the loan and interest over a set period of time.
Principal: This is the money you borrowed to buy the house (Home Price minus Down Payment).
Interest: This is the fee the lender charges you for borrowing the money, expressed as an annual percentage rate.
In the early years of a mortgage, a larger portion of your payment goes toward interest. As time passes, more of your payment is applied to the principal balance.
Key Factors Affecting Your Payment
Several variables can significantly impact your monthly mortgage costs:
Loan Term: A 30-year term typically offers lower monthly payments but results in higher total interest paid over the life of the loan compared to a 15-year term.
Down Payment: Putting more money down reduces your principal loan amount, which lowers both your monthly payment and the total interest paid. A down payment of 20% or more also helps you avoid Private Mortgage Insurance (PMI).
Interest Rate: Even a small difference in interest rates can save or cost you thousands of dollars over the lifespan of a mortgage. Your credit score usually influences the rate lenders offer you.
Why Use a Mortgage Calculator?
Using a calculator allows you to test different scenarios before committing to a loan. You can see how saving for a larger down payment might reduce your monthly burden or how choosing a shorter loan term could save you money on interest in the long run. Note that this calculator provides an estimate for Principal and Interest; you should also budget for property taxes, homeowner's insurance, and potential HOA fees.