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 hoaFees = parseFloat(document.getElementById("hoaFees").value);
var errorMsg = document.getElementById("errorMsg");
var resultsSection = document.getElementById("resultsSection");
// Basic Validation
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(propertyTax) || isNaN(homeInsurance) || isNaN(hoaFees)) {
errorMsg.style.display = "block";
resultsSection.style.display = "none";
return;
}
// Logic Check: Down payment cannot exceed home price
if (downPayment >= homePrice) {
alert("Down payment cannot be greater than or equal to the home price.");
return;
}
errorMsg.style.display = "none";
// Calculation Logic
var principal = homePrice – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
// Amortization Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyPrincipalInterest = 0;
if (interestRate === 0) {
monthlyPrincipalInterest = principal / numberOfPayments;
} else {
var numerator = monthlyRate * Math.pow((1 + monthlyRate), numberOfPayments);
var denominator = Math.pow((1 + monthlyRate), numberOfPayments) – 1;
monthlyPrincipalInterest = principal * (numerator / denominator);
}
var monthlyTax = propertyTax / 12;
var monthlyInsurance = homeInsurance / 12;
var totalMonthlyPayment = monthlyPrincipalInterest + monthlyTax + monthlyInsurance + hoaFees;
// Display Results with formatting
document.getElementById("resPrincipalInterest").innerHTML = "$" + monthlyPrincipalInterest.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTax").innerHTML = "$" + monthlyTax.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resInsurance").innerHTML = "$" + monthlyInsurance.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resHoa").innerHTML = "$" + hoaFees.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTotal").innerHTML = "$" + totalMonthlyPayment.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsSection.style.display = "block";
}
Understanding Your Mortgage Payment
Calculating your monthly mortgage payment is the first critical step in the home buying process. This tool is designed not just to give you a number, but to provide a comprehensive breakdown of your PITI: Principal, Interest, Taxes, and Insurance.
What is PITI?
Most first-time homebuyers focus solely on the loan repayment, but your monthly obligation includes four key components:
Principal: The portion of your payment that pays down the actual loan balance ($350,000 home price – $70,000 down payment = $280,000 principal).
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.
Taxes: Property taxes assessed by your local government, usually held in escrow by your lender and paid annually.
Insurance: Homeowners insurance protects the property against damage. If your down payment is less than 20%, you may also have to pay Private Mortgage Insurance (PMI).
How Interest Rates Impact Affordability
Even a small fluctuation in interest rates can drastically change your purchasing power. For example, on a $300,000 loan, the difference between a 6.0% and a 7.0% interest rate can increase your monthly payment by nearly $200, totaling over $70,000 in extra interest over the life of a 30-year loan.
Reducing Your Monthly Payment
If the calculated total is higher than your budget allows, consider these strategies:
Increase your Down Payment: This lowers the principal amount and may eliminate the need for PMI.
Shop for Lower Insurance: Premiums vary significantly between providers.
Consider a Longer Term: While a 15-year loan saves on interest, a 30-year loan offers lower monthly payments.
Look at HOA Fees: High Homeowners Association fees can skew your debt-to-income ratio; look for properties with lower or no HOA dues.
Using this Calculator for Budgeting
Use the "Total Monthly Payment" figure to determine your debt-to-income (DTI) ratio. Most lenders prefer a DTI below 36%, meaning your total debt payments (mortgage, car loans, student loans, credit cards) should not exceed 36% of your gross monthly income.