Buying a home is one of the largest financial decisions you will ever make. Understanding exactly how much your monthly payment will be is crucial for maintaining financial health. Unlike simple calculators that only look at principal and interest, our comprehensive tool includes estimates for property taxes and homeowners insurance, giving you a realistic view of your "PITI" (Principal, Interest, Taxes, and Insurance) payment.
Calculate Your Payment
30 Years
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15 Years
10 Years
Understanding the Mortgage Formula
While this calculator handles the heavy lifting instantly, it is helpful to understand the math behind your mortgage. The standard formula used to calculate the monthly principal and interest payment is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
M = Total monthly payment
P = Principal loan amount (Home Price minus Down Payment)
i = Monthly interest rate (Annual rate divided by 12)
n = Number of payments (Loan term in years multiplied by 12)
Components of Your Monthly Payment (PITI)
Most lenders look at your "PITI" to determine if you can afford a loan. Here is what that acronym stands for:
1. Principal
This is the money that goes directly towards paying down the balance of your loan. In the early years of a 30-year mortgage, the principal portion is small, but it grows over time as you pay down the debt.
2. Interest
This is the cost of borrowing money. At the beginning of your loan term, interest makes up the majority of your monthly payment. A lower interest rate can save you tens of thousands of dollars over the life of the loan.
3. Taxes
Property taxes are assessed by your local government to fund public services like schools and roads. These are usually paid annually, but lenders often collect 1/12th of the estimated annual amount each month and hold it in an escrow account to pay the bill when it is due.
4. Insurance
Homeowners insurance protects your property against damage from fire, theft, and storms. Like taxes, the premium is often divided into monthly installments included in your mortgage payment.
How Interest Rates Impact Affordability
Even a small change in interest rates can drastically alter your purchasing power. For example, on a $300,000 loan:
At 4.0%, the Principal & Interest payment is roughly $1,432.
At 6.0%, the Principal & Interest payment jumps to roughly $1,799.
That is a difference of over $360 per month just from interest. Using this calculator allows you to test different rate scenarios to see what fits your monthly budget comfortably.
function calculateMortgage() {
// Get input values
var priceInput = document.getElementById('homePrice');
var downInput = document.getElementById('downPayment');
var rateInput = document.getElementById('interestRate');
var termInput = document.getElementById('loanTerm');
var taxInput = document.getElementById('propertyTax');
var insuranceInput = document.getElementById('homeInsurance');
var resultDiv = document.getElementById('mortgageResult');
// Parse values
var price = parseFloat(priceInput.value);
var down = parseFloat(downInput.value);
var rate = parseFloat(rateInput.value);
var term = parseFloat(termInput.value);
var tax = parseFloat(taxInput.value);
var insurance = parseFloat(insuranceInput.value);
// Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(term)) {
resultDiv.style.display = "block";
resultDiv.innerHTML = "Please enter valid numbers for Price, Down Payment, Rate, and Term.";
return;
}
// Set defaults for optional fields if empty
if (isNaN(tax)) tax = 0;
if (isNaN(insurance)) insurance = 0;
// Core Calculation Logic
var principal = price – down;
// Prevent negative principal
if (principal < 0) {
resultDiv.style.display = "block";
resultDiv.innerHTML = "Down payment cannot be greater than home price.";
return;
}
var monthlyRate = rate / 100 / 12;
var numberOfPayments = term * 12;
var monthlyPrincipalInterest = 0;
// Handle zero interest rate edge case
if (rate === 0) {
monthlyPrincipalInterest = principal / numberOfPayments;
} else {
// Standard Mortgage Formula
var numerator = monthlyRate * Math.pow((1 + monthlyRate), numberOfPayments);
var denominator = Math.pow((1 + monthlyRate), numberOfPayments) – 1;
monthlyPrincipalInterest = principal * (numerator / denominator);
}
var monthlyTax = tax / 12;
var monthlyInsurance = insurance / 12;
var totalMonthlyPayment = monthlyPrincipalInterest + monthlyTax + monthlyInsurance;
// Display Results
var htmlOutput = "