How Effective Tax Rate is Calculated

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Mortgage Payment Calculator

30 Years 20 Years 15 Years 10 Years
Principal & Interest: $0.00
Monthly Property Tax: $0.00
Monthly Home Insurance: $0.00
Monthly HOA: $0.00
Total Monthly Payment: $0.00

Understanding Your Mortgage Calculation

Buying a home is one of the largest financial decisions you will make. Our Mortgage Calculator helps you estimate your monthly payments by factoring in principal, interest, taxes, insurance, and HOA fees (often referred to as PITI).

Key Factors That Impact Your Payment

  • Principal: This is the amount of money you borrow from the lender. It is calculated as the Home Price minus your Down Payment.
  • Interest Rate: The cost of borrowing money, expressed as a percentage. Even a small difference in rates (e.g., 6.5% vs 7.0%) can significantly change your monthly payment and total interest paid over the life of the loan.
  • Loan Term: The duration of your loan. A 30-year term offers lower monthly payments but results in higher total interest costs compared to a 15-year term.
  • Escrow Costs: Most lenders require you to pay property taxes and home insurance into an escrow account monthly. These costs vary by location and property value.

How is the Monthly Payment Calculated?

The standard formula for a fixed-rate mortgage is:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Where M is your monthly payment, P is the principal loan amount, i is your monthly interest rate, and n is the number of months in the loan term.

Why Use a Mortgage Calculator?

Using a calculator allows you to test different scenarios. For example, increasing your down payment reduces your principal, which lowers your monthly obligation and eliminates the need for Private Mortgage Insurance (PMI) if you reach 20% equity. Understanding these numbers empowers you to shop for homes within your actual budget, not just the loan amount you are pre-approved for.

function calculateMortgage() { // 1. Get Input Values var homePrice = parseFloat(document.getElementById('mc_home_price').value); var downPayment = parseFloat(document.getElementById('mc_down_payment').value); var interestRate = parseFloat(document.getElementById('mc_interest_rate').value); var loanTermYears = parseInt(document.getElementById('mc_loan_term').value); var annualTax = parseFloat(document.getElementById('mc_property_tax').value); var annualInsurance = parseFloat(document.getElementById('mc_home_insurance').value); var monthlyHOA = parseFloat(document.getElementById('mc_hoa').value); // 2. Validation if (isNaN(homePrice) || homePrice <= 0) homePrice = 0; if (isNaN(downPayment) || downPayment < 0) downPayment = 0; if (isNaN(interestRate) || interestRate < 0) interestRate = 0; if (isNaN(annualTax) || annualTax < 0) annualTax = 0; if (isNaN(annualInsurance) || annualInsurance < 0) annualInsurance = 0; if (isNaN(monthlyHOA) || monthlyHOA < 0) monthlyHOA = 0; // 3. Core Calculations var principal = homePrice – downPayment; var monthlyInterestRate = (interestRate / 100) / 12; var numberOfPayments = loanTermYears * 12; var monthlyPI = 0; // Avoid division by zero if interest rate is 0 if (monthlyInterestRate === 0) { monthlyPI = principal / numberOfPayments; } else { // Standard Mortgage Formula var mathPower = Math.pow(1 + monthlyInterestRate, numberOfPayments); monthlyPI = principal * ((monthlyInterestRate * mathPower) / (mathPower – 1)); } if (principal <= 0) { monthlyPI = 0; } // 4. Calculate Extras (Tax, Insurance) var monthlyTax = annualTax / 12; var monthlyInsurance = annualInsurance / 12; // 5. Total Monthly Payment var totalMonthlyPayment = monthlyPI + monthlyTax + monthlyInsurance + monthlyHOA; // 6. Format Currency Helper function formatMoney(amount) { return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,'); } // 7. Update DOM document.getElementById('res_pi').innerText = formatMoney(monthlyPI); document.getElementById('res_tax').innerText = formatMoney(monthlyTax); document.getElementById('res_ins').innerText = formatMoney(monthlyInsurance); document.getElementById('res_hoa').innerText = formatMoney(monthlyHOA); document.getElementById('res_total').innerText = formatMoney(totalMonthlyPayment); // Show results container document.getElementById('mc_results_area').style.display = 'block'; }

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