Calculating your monthly mortgage payment is a critical step in the home buying process. This tool helps you estimate not just the principal and interest, but also the total cost of ownership including property taxes and homeowners insurance (PITI). Knowing your precise monthly obligations helps determine your true purchasing power.
How the Mortgage Formula Works
Your monthly payment is determined by four primary factors:
Principal: The amount of money you borrow to buy the home. This is calculated by subtracting your down payment from the home price.
Interest: The cost of borrowing money, determined by your Annual Percentage Rate (APR). A lower rate significantly reduces your monthly payment and total interest paid over the life of the loan.
Taxes: Property taxes assessed by your local government. These are often bundled into your monthly payment through an escrow account.
Insurance: Homeowners insurance protects your property against damage and is typically required by lenders.
15-Year vs. 30-Year Terms
Choosing the right loan term affects both your monthly cash flow and long-term wealth. A 30-year term offers lower monthly payments, making homes more affordable on a monthly basis, but results in significantly higher total interest costs. A 15-year term has higher monthly payments but builds equity faster and can save you tens of thousands of dollars in interest.
Improving Your Mortgage Affordability
If the calculated payment is higher than your budget allows, consider increasing your down payment to reduce the loan principal. Alternatively, shopping for a lower interest rate or choosing a less expensive property can bring your Debt-to-Income (DTI) ratio into a more comfortable range.
function calculateMortgage() {
// 1. Get Input Values
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 propertyTax = parseFloat(document.getElementById("propertyTax").value);
var insurance = parseFloat(document.getElementById("insurance").value);
// 2. Validate Inputs
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(propertyTax) || isNaN(insurance)) {
alert("Please enter valid numbers in all fields.");
return;
}
if (homePrice = home price
if (principal 0 && monthlyRate > 0) {
monthlyPrincipalInterest = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else if (principal > 0 && monthlyRate === 0) {
// Case for 0% interest
monthlyPrincipalInterest = principal / numberOfPayments;
}
// Calculate Monthly Taxes and Insurance
var monthlyTax = propertyTax / 12;
var monthlyInsurance = insurance / 12;
var totalMonthlyPayment = monthlyPrincipalInterest + monthlyTax + monthlyInsurance;
// Calculate Totals over Life of Loan
var totalCostOfLoan = (monthlyPrincipalInterest * numberOfPayments);
var totalInterestPaid = totalCostOfLoan – principal;
// 4. Update the DOM with Results
// Helper function for currency formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById("principalInterestDisplay").innerText = formatter.format(monthlyPrincipalInterest);
document.getElementById("taxInsuranceDisplay").innerText = formatter.format(monthlyTax + monthlyInsurance);
document.getElementById("totalMonthlyDisplay").innerText = formatter.format(totalMonthlyPayment);
document.getElementById("loanAmountDisplay").innerText = formatter.format(principal);
document.getElementById("totalInterestDisplay").innerText = formatter.format(totalInterestPaid);
// Show the results section
document.getElementById("result").style.display = "block";
}