function calculateMortgage() {
// 1. Get Input Values using var
var homePrice = parseFloat(document.getElementById('homePrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var loanTerm = parseFloat(document.getElementById('loanTerm').value);
var propertyTax = parseFloat(document.getElementById('propertyTax').value);
var homeInsurance = parseFloat(document.getElementById('homeInsurance').value);
// 2. Validation
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
alert("Please enter valid numbers for the core mortgage fields.");
return;
}
// Handle optional tax/insurance defaults
if (isNaN(propertyTax)) propertyTax = 0;
if (isNaN(homeInsurance)) homeInsurance = 0;
// 3. Logic: Principal
var principal = homePrice – downPayment;
if (principal <= 0) {
alert("Down payment cannot be greater than or equal to the home price.");
return;
}
// 4. Logic: Monthly Payment Formula M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPI = 0;
if (interestRate === 0) {
monthlyPI = principal / numberOfPayments;
} else {
monthlyPI = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// 5. Logic: Taxes and Insurance
var monthlyTax = propertyTax / 12;
var monthlyInsurance = homeInsurance / 12;
var totalMonthly = monthlyPI + monthlyTax + monthlyInsurance;
// 6. Logic: Totals
var totalCost = (monthlyPI * numberOfPayments) + downPayment; // Total cost of home acquisition including interest (excluding tax/ins over time for simplicity of "loan cost" metric usually refers to P+I totals)
var totalRepayment = monthlyPI * numberOfPayments;
var totalInterest = totalRepayment – principal;
// 7. Format Results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// 8. Update DOM
document.getElementById('piResult').innerText = formatter.format(monthlyPI);
document.getElementById('taxInsResult').innerText = formatter.format(monthlyTax + monthlyInsurance);
document.getElementById('totalMonthlyResult').innerText = formatter.format(totalMonthly);
document.getElementById('totalInterestResult').innerText = formatter.format(totalInterest);
document.getElementById('totalCostResult').innerText = formatter.format(totalRepayment + downPayment);
document.getElementById('calc-results').style.display = 'block';
}
Understanding Your Mortgage Payment
Purchasing a home is likely the largest financial commitment you will make in your lifetime. Using a comprehensive mortgage calculator is essential to understand not just the sticker price of the house, but the actual monthly impact on your budget. This tool breaks down your costs into Principal, Interest, Taxes, and Insurance (PITI).
Components of a Mortgage Payment
Your monthly payment is typically composed of four distinct parts:
Principal: The portion of your payment that goes toward paying down the loan balance ($).
Interest: The fee charged by the lender for borrowing the money. In the early years of a 30-year mortgage, the majority of your payment goes toward interest.
Property Taxes: Assessed by your local government based on your home's value. Lenders often collect this monthly and pay it annually on your behalf via an escrow account.
Homeowners Insurance: Protects your property against damage. Like taxes, this is often bundled into your monthly payment.
How Interest Rates Affect Affordability
Even a small difference in interest rates can dramatically change your total loan cost. For example, on a $300,000 loan, a 1% increase in interest rate can add hundreds of dollars to your monthly payment and tens of thousands of dollars to the total interest paid over 30 years. It is highly recommended to shop around with multiple lenders to secure the best rate possible.
30-Year vs. 15-Year Terms
While a 30-year mortgage offers lower monthly payments, a 15-year mortgage significantly reduces the total interest paid. If your budget allows for the higher monthly payments associated with a shorter term, you can build equity much faster and own your home outright in half the time.
Tips for Lowering Your Payment
If the calculated monthly payment is higher than your budget allows, consider the following strategies:
Increase your Down Payment: Putting 20% or more down avoids Private Mortgage Insurance (PMI) and reduces the principal amount.
Improve Credit Score: Higher credit scores generally qualify for lower interest rates.
Look for Lower Property Taxes: different neighborhoods or counties often have varying tax rates.