How to Calculate Interest Rate on Principal Amount

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Monthly Mortgage Payment Calculator

Please enter valid numeric values for all fields.
Principal & Interest: –
Monthly Property Tax: –
Monthly Home Insurance: –
Total Monthly Payment: –
Total Interest Paid over Loan: –

Understanding Your Mortgage Calculation

Purchasing a home is one of the most significant financial decisions you will make in your lifetime. Our Mortgage Calculator is designed to help you estimate your monthly housing costs accurately by factoring in not just the loan repayment, but also recurring costs like property taxes and homeowners insurance.

How Mortgage Payments Are Calculated

A standard mortgage payment is primarily composed of four parts, often referred to as PITI: Principal, Interest, Taxes, and Insurance.

  • Principal: The portion of your payment that reduces the loan balance.
  • Interest: The cost of borrowing money, determined by your interest rate.
  • Taxes: Property taxes charged by your local government, usually collected in escrow by your lender.
  • Insurance: Homeowners insurance to protect your property against damage.

Why the Down Payment Matters

Your down payment significantly impacts your monthly obligations. A larger down payment reduces the principal loan amount, which lowers your monthly principal and interest payments. Additionally, putting down at least 20% typically allows you to avoid Private Mortgage Insurance (PMI), further reducing your monthly costs.

Interest Rates and Loan Terms

Even a small difference in interest rates can equate to thousands of dollars in savings or extra costs over the life of a 30-year loan. Similarly, choosing a 15-year term will increase your monthly payments but drastically reduce the total interest paid. Use this calculator to experiment with different rates and terms to find a comfortable budget for your financial goals.

function calculateMortgage() { // Get input values 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); var errorMsg = document.getElementById('errorMsg'); var resultsSection = document.getElementById('resultsSection'); // Validation if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(propertyTax) || isNaN(homeInsurance)) { errorMsg.style.display = 'block'; resultsSection.style.display = 'none'; return; } // Check for non-sensical values if (homePrice <= 0 || loanTerm <= 0) { errorMsg.innerText = "Price and Term must be greater than zero."; errorMsg.style.display = 'block'; resultsSection.style.display = 'none'; return; } errorMsg.style.display = 'none'; // Calculation Logic var principal = homePrice – downPayment; var monthlyRate = (interestRate / 100) / 12; var numberOfPayments = loanTerm * 12; // Monthly Principal and Interest var monthlyPI = 0; if (interestRate === 0) { monthlyPI = principal / numberOfPayments; } else { monthlyPI = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1); } // Monthly Taxes and Insurance var monthlyTax = propertyTax / 12; var monthlyInsurance = homeInsurance / 12; // Total Monthly Payment var totalMonthly = monthlyPI + monthlyTax + monthlyInsurance; // Total Interest Paid var totalCost = monthlyPI * numberOfPayments; var totalInterest = totalCost – principal; // Update DOM document.getElementById('resPrincipalInterest').innerText = '$' + monthlyPI.toFixed(2); document.getElementById('resTax').innerText = '$' + monthlyTax.toFixed(2); document.getElementById('resInsurance').innerText = '$' + monthlyInsurance.toFixed(2); document.getElementById('resTotalMonthly').innerText = '$' + totalMonthly.toFixed(2); document.getElementById('resTotalInterest').innerText = '$' + totalInterest.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ","); // Show results resultsSection.style.display = 'block'; }

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