function calculateMortgage() {
var homePrice = parseFloat(document.getElementById("homePrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var annualTax = parseFloat(document.getElementById("propertyTax").value);
var annualInsurance = parseFloat(document.getElementById("homeInsurance").value);
var errorDiv = document.getElementById("errorMessage");
var resultsDiv = document.getElementById("resultsArea");
// Validation
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(annualTax) || isNaN(annualInsurance)) {
errorDiv.style.display = "block";
resultsDiv.style.display = "none";
return;
}
if (homePrice < 0 || downPayment < 0 || interestRate < 0 || annualTax < 0 || annualInsurance < 0) {
errorDiv.innerText = "Values cannot be negative.";
errorDiv.style.display = "block";
resultsDiv.style.display = "none";
return;
}
errorDiv.style.display = "none";
// Calculations
var principal = homePrice – downPayment;
var monthlyRate = interestRate / 100 / 12;
var totalPayments = loanTerm * 12;
// Monthly Principal & Interest
var monthlyPI = 0;
if (interestRate === 0) {
monthlyPI = principal / totalPayments;
} else {
monthlyPI = principal * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
}
// Monthly Tax and Insurance
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
// Total Monthly Payment
var totalMonthly = monthlyPI + monthlyTax + monthlyInsurance;
// Update DOM
document.getElementById("resPrincipalInterest").innerText = "$" + monthlyPI.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTax").innerText = "$" + monthlyTax.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resInsurance").innerText = "$" + monthlyInsurance.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTotal").innerText = "$" + totalMonthly.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsDiv.style.display = "block";
}
Understanding Your Mortgage Calculation
Purchasing a home is likely the largest financial decision you will make in your lifetime. Understanding exactly how your monthly mortgage payments are calculated is crucial for maintaining a healthy budget. This Mortgage Payment Calculator breaks down not just the loan repayment, but also the often-overlooked costs of taxes and insurance that make up your PITI (Principal, Interest, Taxes, and Insurance) payment.
Components of Your Monthly Payment
Principal: The portion of your payment that goes toward reducing the loan balance (the $ home price minus your down payment).
Interest: The fee charged by the lender for borrowing the money. In the early years of a mortgage, a higher percentage of your payment goes toward interest.
Property Taxes: Assessed by your local government, these are usually collected by the lender in an escrow account and paid annually on your behalf.
Homeowners Insurance: Protects your property against damage. Like taxes, this is often bundled into your monthly mortgage payment.
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, a 1% increase in interest rate can raise your monthly payment by approximately $150 to $200, costing you tens of thousands of dollars over the life of a 30-year loan. It is often wise to shop around with multiple lenders to secure the lowest possible rate.
30-Year vs. 15-Year Term
Choosing the right loan term depends on your financial goals. A 30-year mortgage offers lower monthly payments, which can free up cash for other investments or expenses, but you will pay significantly more in interest over time. A 15-year mortgage comes with higher monthly payments but allows you to build equity much faster and save a substantial amount on interest.
Estimating Taxes and Insurance
While principal and interest are fixed on a standard fixed-rate mortgage, taxes and insurance can change. A general rule of thumb for estimating property taxes is 1.1% to 1.5% of the home's value annually, depending on your location. Homeowners insurance typically costs between $800 and $1,500 per year for an average-sized home. Always verify these figures with local tax assessors and insurance agents for precision.
Private Mortgage Insurance (PMI)
If your down payment is less than 20% of the home price, lenders usually require Private Mortgage Insurance (PMI). This calculator focuses on PITI, but remember to account for PMI if you are making a smaller down payment. PMI typically costs between 0.5% and 1% of the entire loan amount on an annual basis.