Buying a home is one of the largest financial decisions most people make in their lifetime. Using a comprehensive Mortgage Payment Calculator is essential to understanding what you can truly afford. This tool breaks down your monthly obligations, separating the principal and interest from escrow costs like property taxes and homeowners insurance.
Components of a Mortgage Payment (PITI)
Your monthly check to the bank is often referred to as PITI, which stands for:
Principal: The portion of the payment that reduces the loan balance.
Interest: The cost of borrowing money, determined by your interest rate.
Taxes: Property taxes assessed by your local government, typically held in an escrow account.
Insurance: Homeowners insurance to protect against hazards like fire or theft.
How Interest Rates Affect Affordability
Even a small change in interest rates can significantly impact your monthly payment and the total cost of the loan. For example, on a $300,000 loan, the difference between a 6% and a 7% interest rate can add hundreds of dollars to your monthly payment and tens of thousands in interest over a 30-year term. It is crucial to shop around for the best rate and maintain a good credit score.
Why Include Taxes and Insurance?
Many simple calculators only show Principal and Interest. However, lenders calculate your debt-to-income ratio based on the full monthly housing expense. By inputting your estimated property tax and insurance costs into this calculator, you get a realistic view of the cash flow required to maintain your home.
Amortization Explained
In the early years of a fixed-rate mortgage, the majority of your payment goes toward interest. As time passes, a larger portion is applied to the principal balance. This calculator provides the "Total Interest Paid" metric to help you visualize the long-term cost of borrowing compared to the initial price of the home.
function calculateMortgage() {
// Get Input Values
var homePrice = parseFloat(document.getElementById('mc_home_price').value);
var downPayment = parseFloat(document.getElementById('mc_down_payment').value);
var interestRate = parseFloat(document.getElementById('mc_interest_rate').value);
var loanTermYears = parseInt(document.getElementById('mc_loan_term').value);
var yearlyTax = parseFloat(document.getElementById('mc_property_tax').value);
var yearlyInsurance = parseFloat(document.getElementById('mc_insurance').value);
// Validation
if (isNaN(homePrice) || homePrice <= 0) {
alert("Please enter a valid Home Price.");
return;
}
if (isNaN(downPayment) || downPayment < 0) {
downPayment = 0;
}
if (isNaN(interestRate) || interestRate < 0) {
alert("Please enter a valid Interest Rate.");
return;
}
if (isNaN(yearlyTax)) yearlyTax = 0;
if (isNaN(yearlyInsurance)) yearlyInsurance = 0;
// Calculations
var loanAmount = homePrice – downPayment;
// If down payment is greater than home price
if (loanAmount < 0) {
loanAmount = 0;
}
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPrincipalInterest = 0;
// Mortgage Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
if (interestRate === 0) {
monthlyPrincipalInterest = loanAmount / numberOfPayments;
} else {
monthlyPrincipalInterest = loanAmount * (
(monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) /
(Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1)
);
}
// Tax and Insurance
var monthlyTax = yearlyTax / 12;
var monthlyInsurance = yearlyInsurance / 12;
var totalMonthlyPayment = monthlyPrincipalInterest + monthlyTax + monthlyInsurance;
// Totals
var totalCostOfLoan = (monthlyPrincipalInterest * numberOfPayments);
var totalInterestPaid = totalCostOfLoan – loanAmount;
// Update UI
// Helper for currency formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('mc_monthly_total').innerText = formatter.format(totalMonthlyPayment);
document.getElementById('mc_principal_interest').innerText = formatter.format(monthlyPrincipalInterest);
document.getElementById('mc_tax_monthly').innerText = formatter.format(monthlyTax);
document.getElementById('mc_ins_monthly').innerText = formatter.format(monthlyInsurance);
document.getElementById('mc_total_interest').innerText = formatter.format(totalInterestPaid);
document.getElementById('mc_total_cost').innerText = formatter.format(totalCostOfLoan);
// Show Results
document.getElementById('mc_results').style.display = 'block';
}