function calculateMortgage() {
var homePrice = parseFloat(document.getElementById('homePrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var loanTerm = parseFloat(document.getElementById('loanTerm').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var propertyTax = parseFloat(document.getElementById('propertyTax').value);
var homeInsurance = parseFloat(document.getElementById('homeInsurance').value);
// Validation
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(loanTerm) || isNaN(interestRate)) {
alert("Please enter valid numbers for all required fields.");
return;
}
// Loan Amount
var loanAmount = homePrice – downPayment;
// Monthly Interest Rate
var monthlyRate = (interestRate / 100) / 12;
// Total Number of Payments
var numberOfPayments = loanTerm * 12;
// Calculate Principal & Interest (P&I)
var monthlyPI = 0;
if (interestRate === 0) {
monthlyPI = loanAmount / numberOfPayments;
} else {
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var mathPower = Math.pow(1 + monthlyRate, numberOfPayments);
monthlyPI = loanAmount * ((monthlyRate * mathPower) / (mathPower – 1));
}
// Calculate Monthly Tax and Insurance
var monthlyTax = isNaN(propertyTax) ? 0 : propertyTax / 12;
var monthlyIns = isNaN(homeInsurance) ? 0 : homeInsurance / 12;
// Total
var totalMonthly = monthlyPI + monthlyTax + monthlyIns;
// Display Results
document.getElementById('res-pi').innerHTML = '$' + monthlyPI.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-tax').innerHTML = '$' + monthlyTax.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-ins').innerHTML = '$' + monthlyIns.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-total').innerHTML = '$' + totalMonthly.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('result').style.display = 'block';
}
Understanding Your Mortgage Payment
Buying a home is one of the most significant financial decisions you will make. Using a mortgage calculator is an essential step in understanding what you can afford. This tool breaks down your estimated monthly payment into its core components, often referred to as PITI: Principal, Interest, Taxes, and Insurance.
What is Included in Your Monthly Payment?
While the bank lends you money for the home price minus your down payment, your monthly check covers more than just paying back that loan. Here is a breakdown of the typical costs:
Principal: The portion of your payment that goes directly toward reducing the loan balance.
Interest: The cost of borrowing money, paid to the lender. In the early years of a mortgage, a large percentage of your payment goes toward interest.
Property Taxes: Taxes assessed by your local government based on the value of your property. These are often collected by the lender and held in an escrow account.
Homeowners Insurance: Insurance that protects your home against damages. Like taxes, this is typically paid monthly into an escrow account.
How Interest Rates Impact Affordability
Even a small change in interest rates can have a dramatic effect on your monthly payment and the total cost of the loan over time. For example, on a $300,000 loan, a 1% increase in the interest rate can increase your monthly payment by hundreds of dollars. It is crucial to shop around for the best rate and improve your credit score before applying for a mortgage.
Why Use a Mortgage Calculator?
Before you start house hunting, it is important to know your budget. This calculator helps you test different scenarios—such as putting down a larger down payment or securing a lower interest rate—to see how they affect your bottom line. By inputting accurate estimates for taxes and insurance, you get a realistic view of your future financial obligation, helping you avoid "payment shock" after closing.