function calculateMortgage() {
// Get Input Values
var price = parseFloat(document.getElementById('homePrice').value);
var down = parseFloat(document.getElementById('downPayment').value);
var termYears = parseFloat(document.getElementById('loanTerm').value);
var rateAnnual = parseFloat(document.getElementById('interestRate').value);
var taxAnnual = parseFloat(document.getElementById('propertyTax').value);
var insAnnual = parseFloat(document.getElementById('homeInsurance').value);
var hoaMonthly = parseFloat(document.getElementById('hoaFees').value);
// Validate inputs
if (isNaN(price) || price <= 0) price = 0;
if (isNaN(down) || down < 0) down = 0;
if (isNaN(termYears) || termYears <= 0) termYears = 30;
if (isNaN(rateAnnual) || rateAnnual < 0) rateAnnual = 0;
if (isNaN(taxAnnual) || taxAnnual < 0) taxAnnual = 0;
if (isNaN(insAnnual) || insAnnual < 0) insAnnual = 0;
if (isNaN(hoaMonthly) || hoaMonthly 0) {
monthlyPI = loanAmount / numberOfPayments;
}
} else {
// Standard Amortization Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var powFactor = Math.pow(1 + monthlyRate, numberOfPayments);
monthlyPI = loanAmount * ((monthlyRate * powFactor) / (powFactor – 1));
}
// Monthly Taxes and Insurance
var monthlyTax = taxAnnual / 12;
var monthlyIns = insAnnual / 12;
// Total
var totalMonthly = monthlyPI + monthlyTax + monthlyIns + hoaMonthly;
// Display Results
document.getElementById('resultsArea').style.display = 'block';
// Helper function for formatting currency
var formatMoney = function(num) {
return '$' + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
};
document.getElementById('resPrincipalInterest').innerText = formatMoney(monthlyPI);
document.getElementById('resTax').innerText = formatMoney(monthlyTax);
document.getElementById('resInsurance').innerText = formatMoney(monthlyIns);
document.getElementById('resHOA').innerText = formatMoney(hoaMonthly);
document.getElementById('resTotal').innerText = formatMoney(totalMonthly);
}
Understanding Your Mortgage Calculation
Calculating your monthly mortgage payment is the first critical step in the home buying process. This calculator breaks down the total cost into its four primary components, commonly referred to as PITI: Principal, Interest, Taxes, and Insurance.
1. Principal & Interest (P&I)
This is the core of your loan payment. Principal is the money that goes towards paying down the loan balance, effectively building your equity. Interest is the cost of borrowing that money, paid to the lender. In the early years of a standard fixed-rate mortgage, the majority of your payment goes toward interest, while in later years, more goes toward the principal.
2. Property Taxes
Local governments collect property taxes to fund public services like schools, police, and road maintenance. These are typically assessed annually based on your home's value but are usually paid monthly into an escrow account managed by your lender. Our calculator allows you to input the annual tax amount to determine the monthly impact on your budget.
3. Homeowners Insurance
Lenders require borrowers to maintain homeowners insurance to protect the property against damages like fire or theft. Like property taxes, the annual premium is often divided by 12 and included in your monthly mortgage payment via escrow.
4. HOA Fees
If you are buying a condo or a home in a planned community, you may be subject to Homeowners Association (HOA) fees. While these are usually paid directly to the association rather than the lender, they are a mandatory monthly cost that affects your debt-to-income ratio and overall affordability.
How Interest Rates Affect Buying Power
Even a small change in interest rates can significantly impact your monthly payment and total loan cost. For example, on a $300,000 loan, a 1% increase in interest rate can raise your monthly payment by approximately $150 to $200. Using this calculator to experiment with different rates can help you decide when to lock in a rate or whether to buy "points" to lower your rate upfront.
Tips for Lowering Your Monthly Payment
Increase your Down Payment: Putting 20% or more down eliminates the need for Private Mortgage Insurance (PMI) and reduces the principal loan amount.
Improve your Credit Score: A higher credit score often qualifies you for lower interest rates.
Shop for Insurance: Homeowners insurance premiums vary by provider; shopping around can save you hundreds per year.
Consider a Longer Term: While a 15-year loan saves money on interest long-term, a 30-year loan offers lower monthly payments, providing more monthly cash flow flexibility.