Please enter valid positive numbers for all fields.
Estimated Monthly Payment
$0.00
Principal & Interest: $0
Tax & Insurance: $0
Total Interest Paid
$0.00
Total Loan Cost
$0.00
Understanding Your Mortgage Calculation
Purchasing a home is one of the most significant financial decisions you will make in your lifetime. Understanding how your monthly mortgage payment is calculated is crucial for budgeting and long-term financial planning. This calculator breaks down the costs to give you a clear picture of your financial commitment.
Components of a Mortgage Payment
When you make a mortgage payment, you aren't just paying back the loan. Your monthly bill typically consists of four main components, often referred to as PITI:
Principal: The portion of your payment that reduces the loan balance. In the early years of a mortgage, this amount is small, but it grows over time.
Interest: The cost of borrowing money from your lender. This is calculated based on your remaining loan balance and interest rate.
Taxes: Property taxes assessed by your local government. Lenders often collect this monthly and hold it in an escrow account to pay the annual bill on your behalf.
Insurance: Homeowners insurance protects your property against damage. Like taxes, this is often collected monthly in escrow.
How Interest Rates Affect Buying Power
The interest rate plays a massive role in your monthly payment and the total cost of the loan. A difference of just 1% can change your monthly payment by hundreds of dollars and your total interest paid by tens of thousands of dollars over a 30-year term. Securing a lower rate through a good credit score or a larger down payment can lead to substantial savings.
30-Year vs. 15-Year Mortgages
Choosing the right loan term is a balancing act between monthly affordability and long-term savings:
30-Year Fixed: Offers lower monthly payments, making expensive homes more affordable, but you will pay significantly more in interest over the life of the loan.
15-Year Fixed: Requires higher monthly payments, but you build equity much faster and pay far less interest overall.
Using This Data for Decision Making
Use the "Total Interest Paid" figure in the results above to compare different loan scenarios. Sometimes, a slightly cheaper home or a larger down payment can drastically reduce the "Total Loan Cost," helping you build wealth faster.
function calculateMortgage() {
// 1. Get DOM elements
var homePriceInput = document.getElementById("homePrice");
var downPaymentInput = document.getElementById("downPayment");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var propertyTaxInput = document.getElementById("propertyTax");
var homeInsuranceInput = document.getElementById("homeInsurance");
var resultsSection = document.getElementById("resultsSection");
var monthlyPaymentDisplay = document.getElementById("monthlyPayment");
var piBreakdownDisplay = document.getElementById("piBreakdown");
var taxInsBreakdownDisplay = document.getElementById("taxInsBreakdown");
var totalInterestDisplay = document.getElementById("totalInterest");
var totalCostDisplay = document.getElementById("totalCost");
var errorMsg = document.getElementById("errorMsg");
// 2. Parse values
var P = parseFloat(homePriceInput.value);
var D = parseFloat(downPaymentInput.value);
var r = parseFloat(interestRateInput.value);
var t = parseFloat(loanTermInput.value);
var tax = parseFloat(propertyTaxInput.value);
var ins = parseFloat(homeInsuranceInput.value);
// 3. Validation
if (isNaN(P) || isNaN(D) || isNaN(r) || isNaN(t) || isNaN(tax) || isNaN(ins) ||
P <= 0 || t <= 0 || r = home price
if (loanAmount <= 0) {
monthlyPaymentDisplay.innerHTML = "$0.00";
totalInterestDisplay.innerHTML = "$0.00";
totalCostDisplay.innerHTML = "$" + P.toLocaleString();
resultsSection.style.display = "block";
return;
}
// Monthly Interest Rate (annual / 100 / 12)
var monthlyRate = (r / 100) / 12;
var numberOfPayments = t * 12;
var monthlyPI = 0;
// If interest rate is 0
if (monthlyRate === 0) {
monthlyPI = loanAmount / numberOfPayments;
} else {
// Standard Mortgage Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// mathPow = (1 + i)^n
var mathPow = Math.pow(1 + monthlyRate, numberOfPayments);
monthlyPI = loanAmount * ((monthlyRate * mathPow) / (mathPow – 1));
}
// Calculate Escrow (Tax + Insurance monthly)
var monthlyTax = tax / 12;
var monthlyIns = ins / 12;
var monthlyEscrow = monthlyTax + monthlyIns;
var totalMonthlyPayment = monthlyPI + monthlyEscrow;
// Total stats
var totalPaidOverLife = (monthlyPI * numberOfPayments);
var totalInterestPaid = totalPaidOverLife – loanAmount;
var totalCostOfLoan = totalPaidOverLife + D; // Total money out of pocket for the house (excluding taxes/ins over time as those vary)
// 5. Output Formatting
monthlyPaymentDisplay.innerHTML = "$" + totalMonthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
piBreakdownDisplay.innerHTML = "$" + monthlyPI.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
taxInsBreakdownDisplay.innerHTML = "$" + monthlyEscrow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
totalInterestDisplay.innerHTML = "$" + totalInterestPaid.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
totalCostDisplay.innerHTML = "$" + totalCostOfLoan.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
resultsSection.style.display = "block";
}