A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial for budgeting and financial planning. This calculator helps you estimate your Principal and Interest (P&I) payment, which is a core component of your total housing cost.
The Math Behind the Mortgage Payment
The most common formula used to calculate the monthly mortgage payment (M) is the annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount (the total amount borrowed).
i = Monthly interest rate. This is your Annual Interest Rate divided by 12. For example, if the annual rate is 3.5%, the monthly rate 'i' would be 0.035 / 12 = 0.00291667.
n = Total number of payments over the loan's lifetime. This is your Loan Term in Years multiplied by 12. For a 30-year mortgage, n = 30 * 12 = 360.
How to Use This Calculator
1. Loan Amount: Enter the total amount you plan to borrow for your home purchase. This is the principal of your loan. For instance, if a home costs $400,000 and you make a $50,000 down payment, your loan amount would be $350,000.
2. Annual Interest Rate: Input the yearly interest rate offered by your lender. This is often expressed as a percentage (e.g., 3.5%, 5%, 7%). Be sure to use the annual rate, not a monthly rate.
3. Loan Term (Years): Specify the duration of your mortgage in years. Common terms are 15, 20, or 30 years. A longer term means lower monthly payments but more interest paid over the life of the loan.
4. Calculate: Click the button to see your estimated monthly Principal and Interest (P&I) payment.
Important Considerations
This calculator provides an estimate for your Principal and Interest (P&I) payment only. Your actual total monthly housing expense will likely be higher and may include:
Property Taxes: Annual taxes on your property, often collected by the lender monthly and held in an escrow account.
Homeowner's Insurance: The cost of insuring your home against damage or loss, also typically collected monthly for escrow.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's value, you may be required to pay PMI.
Homeowner Association (HOA) Fees: If applicable, these are recurring fees for community amenities and maintenance.
Always consult with a mortgage professional for a precise loan estimate and to understand all associated costs.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var monthlyPaymentSpan = document.getElementById("monthlyPayment");
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
monthlyPaymentSpan.innerText = "Invalid input. Please enter valid numbers.";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment;
if (monthlyInterestRate === 0) {
// Handle zero interest rate case (simple division)
monthlyPayment = loanAmount / numberOfPayments;
} else {
// Standard mortgage payment formula
var numerator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
monthlyPayment = loanAmount * (numerator / denominator);
}
// Format the result to two decimal places and add currency symbol
monthlyPaymentSpan.innerText = "$" + monthlyPayment.toFixed(2);
}