A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial for budgeting and financial planning. This American Mortgage Calculator helps you estimate your total monthly housing cost, which typically includes not only the principal and interest on the loan but also property taxes, homeowner's insurance, and potentially Private Mortgage Insurance (PMI).
Components of Your Monthly Mortgage Payment (PITI):
Principal: The amount of money borrowed for the home.
Interest: The cost of borrowing money. This is paid to the lender over the life of the loan.
Taxes: Property taxes levied by local government entities. These are usually paid annually but are often collected by the lender in monthly installments and held in an escrow account.
Insurance: Homeowner's insurance protects against damage to your property. Like property taxes, premiums are often paid annually but collected monthly by the lender for escrow.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's purchase price, lenders typically require PMI to protect them against potential default. This cost is usually a percentage of the loan amount annually.
The Amortization Formula (Principal & Interest)
The core of the mortgage payment calculation involves determining the fixed monthly payment that will pay off the loan over its term. The standard formula for calculating the monthly payment (M) for a mortgage is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (the amount you borrowed)
i = Your monthly interest rate (annual rate divided by 12)
n = The total number of payments over the loan's lifetime (loan term in years multiplied by 12)
Calculating Total Monthly Payment (PITI + PMI)
Our calculator takes the Principal & Interest (P&I) calculation and adds the estimated monthly costs for Property Taxes, Homeowner's Insurance, and PMI to give you a more comprehensive picture of your actual housing expense.
Total Monthly Payment = M + Monthly Property Tax + Monthly Homeowner's Insurance + Monthly PMI
Loan Amount: Enter the total amount you are borrowing for the home.
Annual Interest Rate: Input the yearly interest rate for your mortgage, as a percentage (e.g., 3.5).
Loan Term (Years): Specify the duration of your mortgage in years (e.g., 15, 30).
Loan Term (Months – Optional): You can also enter the term in months directly. If you enter both years and months, the months value will take precedence.
Annual Property Tax: Enter the total property tax you expect to pay annually.
Annual Homeowner's Insurance: Enter the estimated annual cost of your homeowner's insurance policy.
Annual PMI (%): If your down payment is less than 20%, enter the annual PMI rate as a percentage (e.g., 0.5 for 0.5%). Leave blank or enter 0 if not applicable.
Click "Calculate Monthly Payment" to see your estimated total monthly housing cost.
Example Scenario:
Let's say you are purchasing a home and need a mortgage with the following details:
Loan Amount: $350,000
Annual Interest Rate: 4.0%
Loan Term: 30 Years
Annual Property Tax: $5,000
Annual Homeowner's Insurance: $1,500
Annual PMI Rate: 0.75%
Using our calculator, you would input these values. The calculator would first compute the Principal & Interest payment using the amortization formula, then add the monthly property tax ($5000/12), monthly insurance ($1500/12), and monthly PMI (($350000 * 0.0075)/12) to provide your estimated total monthly payment.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var loanTermMonthsInput = parseFloat(document.getElementById("loanTermMonths").value);
var propertyTax = parseFloat(document.getElementById("propertyTax").value);
var homeInsurance = parseFloat(document.getElementById("homeInsurance").value);
var pmiRate = parseFloat(document.getElementById("pmi").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = "–"; // Clear previous results
// Input validation
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || isNaN(propertyTax) || isNaN(homeInsurance) || isNaN(pmiRate)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
var loanTermMonths = loanTermMonthsInput;
if (isNaN(loanTermMonths) || loanTermMonths 0) {
loanTermMonths = loanTermYears * 12;
} else {
resultDiv.innerHTML = "Please enter a valid loan term (years or months).";
return;
}
}
if (loanTermMonths 0) {
principalAndInterest = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths)) / (Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1);
} else {
// If interest rate is 0, principal and interest is just loan amount divided by term
principalAndInterest = loanAmount / loanTermMonths;
}
var monthlyPropertyTax = propertyTax / 12;
var monthlyHomeInsurance = homeInsurance / 12;
var monthlyPmi = 0;
if (!isNaN(pmiRate) && pmiRate > 0) {
monthlyPmi = (loanAmount * (pmiRate / 100));
}
var totalMonthlyPayment = principalAndInterest + monthlyPropertyTax + monthlyHomeInsurance + monthlyPmi;
// Format and display results
resultDiv.innerHTML = '$' + totalMonthlyPayment.toFixed(2) +
'(P&I: $' + principalAndInterest.toFixed(2) +
', Taxes: $' + monthlyPropertyTax.toFixed(2) +
', Insurance: $' + monthlyHomeInsurance.toFixed(2) +
', PMI: $' + monthlyPmi.toFixed(2) + ')';
}