function calculateMortgage() {
// Get input values using var
var homePrice = parseFloat(document.getElementById('homePrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('loanTerm').value);
// Validate inputs
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(rate) || isNaN(years) || homePrice <= 0 || years <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
// Calculate Loan Principal
var principal = homePrice – downPayment;
// Handle edge case: Down payment larger than home price
if (principal < 0) {
alert("Down payment cannot be greater than the home price.");
return;
}
// Interest rate calculations
var monthlyRate = rate / 100 / 12;
var numberOfPayments = years * 12;
var monthlyPayment = 0;
// Logic for mortgage calculation
if (rate === 0) {
monthlyPayment = principal / numberOfPayments;
} else {
monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
var totalCost = monthlyPayment * numberOfPayments;
var totalInterest = totalCost – principal;
// Update the DOM
document.getElementById('monthlyPayment').innerText = '$' + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('loanAmountResult').innerText = '$' + principal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalInterestResult').innerText = '$' + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalCostResult').innerText = '$' + totalCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show results
document.getElementById('mortgageResults').style.display = 'block';
}
Understanding Your Mortgage Calculation
Buying a home is one of the most significant financial decisions you will make in your lifetime. Understanding how your monthly mortgage payment is calculated is crucial for budgeting and financial planning. Our Mortgage Payment Calculator helps you estimate your monthly principal and interest payments based on the home price, your down payment, the interest rate, and the loan term.
How the Mortgage Formula Works
While the calculator above does the heavy lifting instantly, the logic behind it is based on the standard amortization formula used by lenders worldwide. The calculation determines the fixed monthly payment required to pay off the loan principal plus interest over a set period (typically 15 or 30 years).
The primary factors influencing your payment are:
Principal: This is the amount you borrow, calculated as the Home Price minus your Down Payment.
Interest Rate: The annual cost of borrowing money, expressed as a percentage. Even a small difference (e.g., 6.5% vs 7.0%) can significantly impact your monthly payment and total interest paid.
Loan Term: The length of time you have to repay the loan. A 30-year term offers lower monthly payments but results in higher total interest costs compared to a 15-year term.
Example Scenario
Let's look at a realistic example to illustrate how these numbers work together:
Imagine you are purchasing a home for $350,000. You have saved a 20% down payment of $70,000, meaning you need to borrow $280,000.
If you secure a 30-year fixed-rate mortgage at an interest rate of 6.5%:
Your monthly principal and interest payment would be approximately $1,769.82.
Over the life of the loan, you would pay a total of $357,136 in interest alone.
The total cost of the loan (Principal + Interest) would be roughly $637,136.
Why Your "Real" Payment Might Be Higher
This calculator focuses on Principal and Interest (often abbreviated as P&I). However, most homeowners have a monthly bill that includes other costs, commonly referred to as PITI:
Property Taxes: Taxes charged by your local government based on the value of your property.
Homeowners Insurance: Protection against damage to your home and liability.
PMI (Private Mortgage Insurance): Usually required if your down payment is less than 20%.
HOA Fees: If you buy a condo or a home in a planned community, you may owe Homeowners Association dues.
When budgeting for your new home, remember to add estimates for taxes and insurance to the figure provided by the calculator above to get a complete picture of your housing affordability.