A mortgage is a loan used to purchase real estate, where the property itself serves as collateral. The monthly mortgage payment is a crucial figure for homebuyers as it directly impacts their budget and financial obligations. Understanding how this payment is calculated is key to responsible homeownership.
The standard formula for calculating a fixed-rate mortgage payment is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment
P = The principal loan amount (the amount you borrow)
i = Your monthly interest rate (annual rate divided by 12)
n = The total number of payments over the loan's lifetime (loan term in years multiplied by 12)
This calculator helps you estimate your principal and interest (P&I) payment. Keep in mind that your actual total monthly housing expense may also include property taxes, homeowner's insurance, and potentially Private Mortgage Insurance (PMI), which are not factored into this basic calculation.
Example:
If you borrow $300,000 (P) at an annual interest rate of 4.5% (which is 0.045 / 12 = 0.00375 monthly, or i) for 30 years (which is 30 * 12 = 360 payments, or n), your estimated monthly principal and interest payment would be approximately $1,520.06.
function calculateMortgage() {
var loanAmountInput = document.getElementById("loanAmount");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var resultDisplay = document.getElementById("monthlyPaymentResult");
var principal = parseFloat(loanAmountInput.value);
var annualRate = parseFloat(interestRateInput.value);
var loanTermYears = parseFloat(loanTermInput.value);
var errorMessages = [];
if (isNaN(principal) || principal <= 0) {
errorMessages.push("Please enter a valid loan amount greater than zero.");
}
if (isNaN(annualRate) || annualRate < 0) {
errorMessages.push("Please enter a valid annual interest rate (e.g., 4.5).");
}
if (isNaN(loanTermYears) || loanTermYears 0) {
resultDisplay.innerHTML = "Error: " + errorMessages.join("");
return;
}
var monthlyRate = annualRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
resultDisplay.innerHTML = "Error: Calculation resulted in an invalid number. Please check your inputs.";
} else {
resultDisplay.innerHTML = "Monthly Payment: $" + monthlyPayment.toFixed(2) + "";
}
}