Understanding your monthly mortgage obligation is the first step in the home buying process. This specific calculator allows you to estimate your monthly principal and interest payments based on the home's purchase price, your down payment, the interest rate, and the loan term. By adjusting these variables, you can determine a budget that suits your financial situation before approaching a lender.
Monthly Payment: –
Loan Amount:–
Total Interest Paid:–
Total Cost of Loan:–
Payoff Date:–
How Your Mortgage Payment is Calculated
This calculator uses the standard amortization formula to determine your monthly principal and interest payments. The calculation takes into account the following specific factors:
Principal (Loan Amount): This is the Home Price minus your Down Payment. It is the actual amount of money you are borrowing from the bank.
Interest Rate: The annual percentage rate (APR) charged by the lender. This is divided by 12 to find the monthly periodic rate used in the calculation.
Loan Term: The duration of the loan in years. A standard term is 30 years (360 months) or 15 years (180 months). A shorter term results in higher monthly payments but significantly less interest paid over the life of the loan.
The Amortization Formula
The specific mathematical formula used to calculate your monthly mortgage payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Total monthly payment
P = Principal loan amount
i = Monthly interest rate (Annual Rate / 12)
n = Number of payments (Years * 12)
Why Your Down Payment Matters
Increasing your down payment reduces the Principal amount (P). Because interest is calculated on the remaining balance of the principal, a larger down payment reduces both your monthly installment and the total interest paid over the life of the loan. For example, putting 20% down avoids Private Mortgage Insurance (PMI) in many cases, which is an additional cost not included in the pure principal and interest calculation above.
function calculateMortgage() {
var homePriceInput = document.getElementById("homePrice");
var downPaymentInput = document.getElementById("downPayment");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var resultDiv = document.getElementById("mortgageResults");
var homePrice = parseFloat(homePriceInput.value);
var downPayment = parseFloat(downPaymentInput.value);
var interestRate = parseFloat(interestRateInput.value);
var loanTerm = parseFloat(loanTermInput.value);
// Validation
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
alert("Please enter valid numbers for all fields.");
return;
}
if (homePrice <= 0 || loanTerm <= 0) {
alert("Home Price and Loan Term must be greater than zero.");
return;
}
// Logic specific to Mortgage Calculation
var principal = homePrice – downPayment;
// Handle case where down payment is greater than home price
if (principal < 0) {
alert("Down payment cannot be greater than the home price.");
return;
}
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPayment = 0;
// Handle zero interest rate edge case
if (interestRate === 0) {
monthlyPayment = principal / numberOfPayments;
} else {
// Standard Amortization Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var x = Math.pow(1 + monthlyRate, numberOfPayments);
monthlyPayment = (principal * x * monthlyRate) / (x – 1);
}
var totalPayment = monthlyPayment * numberOfPayments;
var totalInterest = totalPayment – principal;
// Calculate Payoff Date
var today = new Date();
var payoffYear = today.getFullYear() + loanTerm;
var payoffMonth = today.toLocaleString('default', { month: 'long' });
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// Updating the DOM
document.getElementById("monthlyPaymentResult").innerHTML = formatter.format(monthlyPayment);
document.getElementById("loanAmountResult").innerHTML = formatter.format(principal);
document.getElementById("totalInterestResult").innerHTML = formatter.format(totalInterest);
document.getElementById("totalCostResult").innerHTML = formatter.format(totalPayment);
document.getElementById("payoffDateResult").innerHTML = payoffMonth + " " + payoffYear;
// Show results container
resultDiv.style.display = "block";
}