Estimate your monthly payments for a $500,000 loan
15 Years
20 Years
25 Years
30 Years
40 Years
Monthly Payment: $0.00
Loan Amount
$500,000
Interest Rate
6.50%
Loan Term
30 Years
Understanding Your Mortgage Payment
Securing a mortgage is a significant financial step, and understanding how your monthly payment is calculated is crucial. This calculator helps you estimate the principal and interest portion of your monthly mortgage payment for a loan amount of $500,000.
The Mortgage Payment Formula
The standard formula used to calculate a fixed-rate mortgage payment is based on the loan amount, the interest rate, and the loan term. This is often referred to as an annuity formula or the amortization formula.
The formula is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (principal and interest)
P = The principal loan amount (the initial amount borrowed, e.g., $500,000)
i = Your monthly interest rate (your annual interest rate divided by 12)
n = The total number of payments over the loan's lifetime (your loan term in years multiplied by 12)
How the Calculator Works
When you input the loan amount, annual interest rate, and loan term, this calculator performs the following steps:
Converts Annual Rate to Monthly Rate: The annual interest rate is divided by 12 to get the monthly interest rate (i). For example, a 6.5% annual rate becomes (0.065 / 12) ≈ 0.0054167 per month.
Calculates Total Number of Payments: The loan term in years is multiplied by 12 to find the total number of monthly payments (n). A 30-year loan has 360 payments.
Applies the Formula: These values are then plugged into the mortgage payment formula to compute 'M', the estimated monthly principal and interest payment.
What This Calculator Doesn't Include
It's important to note that this calculator provides an estimate of the principal and interest (P&I) portion of your mortgage payment. Your actual total monthly housing expense, often called your PITI payment, will likely be higher because it typically includes:
Property Taxes: Annual taxes spread out over 12 months.
Homeowners Insurance: Annual premiums spread out over 12 months.
Private Mortgage Insurance (PMI): If your down payment is less than 20%, PMI may be required and added to your monthly payment.
Homeowners Association (HOA) Fees: If applicable in your community.
Using This Calculator
This calculator is a valuable tool for:
Budgeting: Understand the potential impact of a $500,000 mortgage on your monthly budget.
Comparing Scenarios: See how changing the interest rate or loan term affects your monthly payment. A shorter term means higher monthly payments but less interest paid overall, while a longer term means lower monthly payments but more interest paid over time.
Pre-qualification: Get a ballpark figure to discuss with lenders.
Remember to consult with a mortgage professional for a personalized quote and to understand all the costs associated with obtaining a mortgage.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
// Update displayed values
document.getElementById("displayLoanAmount").textContent = "$" + loanAmount.toFixed(0).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
document.getElementById("displayInterestRate").textContent = annualInterestRate.toFixed(2) + "%";
var selectedOption = document.querySelector("#loanTermYears option[value='" + loanTermYears + "']");
document.getElementById("displayLoanTerm").textContent = selectedOption ? selectedOption.text : loanTermYears + " Years";
// Basic validation
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || loanAmount <= 0 || annualInterestRate < 0 || loanTermYears 0) {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfMonths)) / (Math.pow(1 + monthlyInterestRate, numberOfMonths) – 1);
} else {
// Handle zero interest rate case
monthlyPayment = loanAmount / numberOfMonths;
}
// Display the result, formatted as currency
document.getElementById("result").innerHTML = 'Monthly Payment: $' + monthlyPayment.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
}
// Trigger calculation on initial load if default values are set
document.addEventListener('DOMContentLoaded', function() {
calculateMortgage();
});