A mortgage is a long-term loan used to purchase real estate. The monthly mortgage payment is a crucial figure for any homebuyer, as it directly impacts your budget and financial planning. This calculator helps you estimate your principal and interest payment, which is a significant part of your total housing cost.
Key Components of the Calculation:
Loan Amount (Principal): This is the total amount of money you are borrowing from the lender to buy your home.
Annual Interest Rate: This is the yearly percentage charged by the lender for the loan. A lower interest rate generally means a lower monthly payment and less interest paid over the life of the loan.
Loan Term: This is the duration of the loan, typically expressed in years (e.g., 15, 20, 30 years). A shorter loan term means higher monthly payments but less interest paid overall. A longer term results in lower monthly payments but more interest paid over time.
How the Calculation Works:
The monthly mortgage payment is calculated using the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment
P = Your principal loan amount
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 provides an estimate of your principal and interest payment. Remember that your actual monthly housing costs may also include property taxes, homeowners insurance, and potentially private mortgage insurance (PMI) or homeowners association (HOA) fees.
Example:
Let's say you are looking to buy a home and need a mortgage with the following details:
Loan Amount (Principal): $250,000
Annual Interest Rate: 4.0%
Loan Term: 30 years
Using the calculator:
Principal = $250,000
Annual Interest Rate = 4.0%
Loan Term = 30 years
The estimated monthly payment for principal and interest would be approximately $1,193.54.
function calculateMortgage() {
var principal = parseFloat(document.getElementById("principal").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var mortgageResultDiv = document.getElementById("mortgageResult");
if (isNaN(principal) || isNaN(annualInterestRate) || isNaN(loanTerm) || principal <= 0 || annualInterestRate < 0 || loanTerm <= 0) {
mortgageResultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
mortgageResultDiv.innerHTML = "Calculation resulted in an invalid number. Please check your inputs.";
return;
}
mortgageResultDiv.innerHTML = "