function calculateMortgage() {
// 1. 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 loanTermYears = parseFloat(document.getElementById("loanTerm").value);
var propertyTaxYear = parseFloat(document.getElementById("propertyTax").value);
var homeInsuranceYear = parseFloat(document.getElementById("homeInsurance").value);
var hoaFeesMonth = parseFloat(document.getElementById("hoaFees").value);
// 2. Validate Inputs
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTermYears)) {
alert("Please enter valid numbers for Home Price, Down Payment, Interest Rate, and Loan Term.");
return;
}
// Handle optional fields set to 0 if empty
if (isNaN(propertyTaxYear)) propertyTaxYear = 0;
if (isNaN(homeInsuranceYear)) homeInsuranceYear = 0;
if (isNaN(hoaFeesMonth)) hoaFeesMonth = 0;
// 3. Core Calculations
var principal = homePrice – downPayment;
// Handle edge case: Negative loan amount
if (principal <= 0) {
alert("Down payment cannot be greater than or equal to Home Price.");
return;
}
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
// Calculate Monthly Principal & Interest (P&I)
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyPI = 0;
if (interestRate === 0) {
monthlyPI = principal / numberOfPayments;
} else {
monthlyPI = principal * ( (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1) );
}
var monthlyTax = propertyTaxYear / 12;
var monthlyInsurance = homeInsuranceYear / 12;
var totalMonthlyPayment = monthlyPI + monthlyTax + monthlyInsurance + hoaFeesMonth;
var totalCostOfLoan = (monthlyPI * numberOfPayments) + downPayment; // Includes downpayment + all P&I payments
var totalPrincipalAndInterest = monthlyPI * numberOfPayments;
var totalInterest = totalPrincipalAndInterest – principal;
// 4. Update UI
document.getElementById("resPrincipalInterest").innerHTML = "$" + monthlyPI.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTax").innerHTML = "$" + monthlyTax.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resInsurance").innerHTML = "$" + monthlyInsurance.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resHOA").innerHTML = "$" + hoaFeesMonth.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTotalMonthly").innerHTML = "$" + totalMonthlyPayment.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resLoanAmount").innerHTML = "$" + principal.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTotalInterest").innerHTML = "$" + totalInterest.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTotalCost").innerHTML = "$" + (totalPrincipalAndInterest + (propertyTaxYear * loanTermYears) + (homeInsuranceYear * loanTermYears) + (hoaFeesMonth * numberOfPayments)).toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show result container
document.getElementById("resultContainer").style.display = "block";
}
Understanding Your Mortgage Payment
Calculating your mortgage payment is a critical step in the home-buying process. While the sticker price of a home gives you a general idea of the cost, your actual monthly obligation involves several components, often referred to as PITI (Principal, Interest, Taxes, and Insurance).
1. Principal and Interest
This is the core of your mortgage payment. Principal is the money that goes towards paying off the loan balance itself, while Interest is the cost of borrowing that money from the lender. In the early years of a typical 30-year fixed-rate mortgage, the majority of your payment goes toward interest. As the loan matures, a larger portion shifts toward paying down the principal.
2. Property Taxes and Insurance
Most lenders require you to pay a prorated portion of your annual property taxes and homeowners insurance each month. These funds are held in an escrow account and paid on your behalf when they are due.
Property Taxes: Assessed by your local government based on the value of your property.
Homeowners Insurance: Protects your home against damage from fire, theft, and other disasters.
3. Private Mortgage Insurance (PMI)
If you put down less than 20% of the home's value, lenders often require Private Mortgage Insurance. This calculator focuses on the standard components, but keep in mind that PMI can add 0.5% to 1% of the loan amount to your annual costs until you build enough equity.
How to Lower Your Monthly Payment
If the result from the mortgage calculator above is higher than your budget allows, consider these strategies:
Increase your down payment: This reduces the principal loan amount and lowers your monthly P&I.
Shop for a lower interest rate: Even a 0.5% difference can save thousands over the life of the loan.
Extend the loan term: Switching from a 15-year to a 30-year term lowers monthly payments, though you will pay more in total interest over time.
Look in areas with lower property taxes: Tax rates vary significantly by county and municipality.
Is Buying Cheaper than Renting?
Using this calculator helps you compare the monthly cash flow of owning versus renting. However, remember that owning a home also comes with maintenance costs (repairs, lawn care, HVAC servicing) that are typically covered by a landlord when renting. Financial experts recommend budgeting 1% of your home's value annually for maintenance.