Calculating your monthly mortgage payment is a crucial first step in the home-buying process. While the sticker price of a home is important, the monthly cash flow requirement is what determines affordability for most buyers. This calculator breaks down the four main components of your payment, often referred to as PITI (Principal, Interest, Taxes, and Insurance).
The 4 Components of a Mortgage Payment
Principal: This is the portion of your payment that goes directly toward reducing your loan balance. In the early years of a mortgage, this amount is small, but it grows over time as you pay down the debt.
Interest: This is the cost of borrowing money from your lender. Mortgage interest is typically calculated monthly on the remaining balance. A higher interest rate significantly increases both your monthly payment and the total cost of the loan.
Taxes: Property taxes are assessed by your local government to fund schools, roads, and services. Lenders often collect this monthly and hold it in an escrow account to pay the tax bill when it's due.
Insurance: Homeowners insurance protects your property against damage. Like taxes, this is usually collected monthly into your escrow account. If you put down less than 20%, you may also have to pay Private Mortgage Insurance (PMI), which protects the lender.
How Interest Rates Impact Your Loan
Even a small fluctuation in interest rates can have a massive impact on your purchasing power. For example, on a $300,000 loan, the difference between a 6% and a 7% interest rate can change your monthly payment by nearly $200 and increase the total interest paid over 30 years by over $70,000.
Using This Calculator for Budgeting
To get the most accurate result, ensure you input realistic figures for property taxes and insurance, as these vary widely by location. Check local real estate listings to find average property tax history for homes in your price range. Don't forget to include HOA (Homeowners Association) fees if you are looking at condos or planned communities, as these are paid separately but affect your debt-to-income ratio.
function calculateMortgage() {
// 1. Get Inputs
var homePrice = parseFloat(document.getElementById('mc-home-price').value);
var downPayment = parseFloat(document.getElementById('mc-down-payment').value);
var termYears = parseInt(document.getElementById('mc-loan-term').value);
var annualRate = parseFloat(document.getElementById('mc-interest-rate').value);
var annualTax = parseFloat(document.getElementById('mc-property-tax').value);
var annualIns = parseFloat(document.getElementById('mc-home-insurance').value);
var monthlyHOA = parseFloat(document.getElementById('mc-hoa-fees').value);
var errorDiv = document.getElementById('mc-error');
var resultsDiv = document.getElementById('mc-results');
// 2. Validate Inputs
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(termYears) || isNaN(annualRate) ||
isNaN(annualTax) || isNaN(annualIns) || isNaN(monthlyHOA)) {
errorDiv.style.display = 'block';
resultsDiv.style.display = 'none';
return;
}
if (homePrice < 0 || downPayment < 0 || annualRate < 0) {
errorDiv.style.display = 'block';
errorDiv.innerText = "Values cannot be negative.";
resultsDiv.style.display = 'none';
return;
}
errorDiv.style.display = 'none';
// 3. Calculation Logic
var loanAmount = homePrice – downPayment;
// If down payment is greater than home price
if (loanAmount 0 && monthlyRate > 0) {
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
monthlyPI = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else if (loanAmount > 0 && monthlyRate === 0) {
monthlyPI = loanAmount / totalPayments;
}
// Monthly Tax and Insurance
var monthlyTax = annualTax / 12;
var monthlyIns = annualIns / 12;
// Total Monthly Payment
var totalMonthly = monthlyPI + monthlyTax + monthlyIns + monthlyHOA;
// Total Stats
var totalPaidPI = monthlyPI * totalPayments;
var totalInterest = totalPaidPI – loanAmount;
// Payoff Date
var today = new Date();
var payoffYear = today.getFullYear() + termYears;
var monthNames = ["Jan", "Feb", "Mar", "Apr", "May", "Jun", "Jul", "Aug", "Sep", "Oct", "Nov", "Dec"];
var payoffDateStr = monthNames[today.getMonth()] + " " + payoffYear;
// 4. Update DOM
function formatCurrency(num) {
return '$' + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
document.getElementById('mc-total-monthly').innerHTML = formatCurrency(totalMonthly);
document.getElementById('mc-pi-val').innerHTML = formatCurrency(monthlyPI);
document.getElementById('mc-tax-val').innerHTML = formatCurrency(monthlyTax);
document.getElementById('mc-ins-val').innerHTML = formatCurrency(monthlyIns);
document.getElementById('mc-hoa-val').innerHTML = formatCurrency(monthlyHOA);
document.getElementById('mc-loan-total').innerHTML = formatCurrency(loanAmount);
document.getElementById('mc-interest-total').innerHTML = formatCurrency(totalInterest);
document.getElementById('mc-payoff-date').innerHTML = payoffDateStr;
// Show results
resultsDiv.style.display = 'block';
}