A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial for budgeting and financial planning. This calculator helps you estimate your Principal and Interest (P&I) payment based on the loan amount, interest rate, and loan term.
How the Calculation Works
The standard formula for calculating a fixed-rate mortgage payment is the annuity formula:
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. This is your annual interest rate divided by 12. For example, if your annual rate is 4.5%, your monthly rate is 0.045 / 12 = 0.00375.
n = The total number of payments over the loan's lifetime. This is your loan term in years multiplied by 12. For a 30-year mortgage, n = 30 * 12 = 360.
This calculator uses these inputs to determine the monthly P&I payment.
Important Considerations:
The monthly payment calculated here only includes Principal and Interest (P&I). Your actual total monthly housing payment will likely be higher. It often includes:
Property Taxes: Annual taxes paid in monthly installments.
Homeowner's Insurance: Annual insurance premiums paid in monthly installments.
Private Mortgage Insurance (PMI): If your down payment is less than 20%, you'll likely pay PMI, which protects the lender.
Homeowner Association (HOA) Fees: If applicable to your property.
Always consult with a mortgage professional to get a precise quote that includes all applicable costs and fees.
Using the Calculator:
1. Loan Amount: Enter the total amount you plan to borrow for the property.
2. Annual Interest Rate: Enter the yearly interest rate offered by the lender.
3. Loan Term: Enter the number of years you will take to repay the loan (e.g., 15, 30 years).
Click "Calculate Monthly Payment" to see your estimated P&I payment. Experiment with different scenarios to see how changes in loan amount, interest rate, or term affect your monthly payments.
function calculateMortgage() {
var loanAmountInput = document.getElementById("loanAmount");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var resultDiv = document.getElementById("result");
var principal = parseFloat(loanAmountInput.value);
var annualRate = parseFloat(interestRateInput.value);
var loanTermYears = parseFloat(loanTermInput.value);
if (isNaN(principal) || principal <= 0) {
resultDiv.innerHTML = "Please enter a valid loan amount.";
return;
}
if (isNaN(annualRate) || annualRate < 0) {
resultDiv.innerHTML = "Please enter a valid annual interest rate.";
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
resultDiv.innerHTML = "Please enter a valid loan term in years.";
return;
}
var monthlyRate = (annualRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment;
if (monthlyRate === 0) {
// Handle zero interest rate case separately to avoid division by zero
monthlyPayment = principal / numberOfPayments;
} else {
monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Format the currency for display
var formattedMonthlyPayment = monthlyPayment.toLocaleString(undefined, {
style: 'currency',
currency: 'USD'
});
resultDiv.innerHTML = formattedMonthlyPayment + "(Estimated Principal & Interest Payment)";
}