Home Loan Calculator

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home loan calculator
Calculate Monthly Payment
Result:
function calculateHomeLoan(){var price=parseFloat(document.getElementById('home_price').value);var down=parseFloat(document.getElementById('down_payment').value);var rate=parseFloat(document.getElementById('interest_rate').value);var term=parseFloat(document.getElementById('loan_term').value);if(isNaN(price)||isNaN(down)||isNaN(rate)||isNaN(term)){alert('Please enter valid numerical values.');return;}var principal=price-down;if(principal<=0){alert('Down payment cannot exceed or equal the home price.');return;}var monthlyRate=rate/100/12;var numberOfPayments=term*12;var monthlyPayment=0;if(rate===0){monthlyPayment=principal/numberOfPayments;}else{monthlyPayment=principal*(monthlyRate*Math.pow(1+monthlyRate,numberOfPayments))/(Math.pow(1+monthlyRate,numberOfPayments)-1);}var totalPaid=monthlyPayment*numberOfPayments;var totalInterest=totalPaid-principal;document.getElementById('res_main').innerHTML="Monthly Payment: $"+monthlyPayment.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2});var details="Loan Amount: $"+principal.toLocaleString()+"
Total Interest: $"+totalInterest.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2})+"
Total Cost of Loan: $"+totalPaid.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2});document.getElementById('res_details').innerHTML=details;}

Using the Home Loan Calculator

Choosing a new home is a major life milestone, but understanding the financial commitment is equally important. This home loan calculator helps you estimate your monthly principal and interest payments based on the home's price, your down payment, and current market rates.

By adjusting the variables, you can see how a larger down payment or a shorter loan term affects your monthly budget and the total interest you will pay over the life of the loan.

Home Price
The total purchase price of the property you wish to buy.
Down Payment
The upfront cash payment you make toward the purchase. This reduces the total amount you need to borrow.
Interest Rate
The annual percentage rate (APR) charged by the lender for borrowing the funds.
Loan Term
The length of time you have to repay the loan, typically 15, 20, or 30 years.

How It Works: The Mortgage Formula

The home loan calculator uses the standard amortization formula to determine fixed monthly payments. This ensures that by the end of the term, both the principal and the accrued interest are fully paid off.

M = P [ r(1 + r)^n ] / [ (1 + r)^n – 1 ]

  • M: Total monthly payment
  • P: Principal loan amount (Home Price – Down Payment)
  • r: Monthly interest rate (Annual Rate / 12 months)
  • n: Number of months (Loan Term in years × 12)

Home Loan Calculation Example

Scenario: You are buying a home for $400,000 with a $80,000 down payment (20%). You secure a 30-year fixed-rate mortgage at 7% interest.

Step-by-step calculation:

  1. Calculate Principal: $400,000 – $80,000 = $320,000
  2. Monthly Interest Rate: 0.07 / 12 = 0.005833
  3. Total Payments: 30 × 12 = 360
  4. Apply Formula: $320,000 [ 0.005833(1.005833)^360 ] / [ (1.005833)^360 – 1 ]
  5. Monthly Payment: $2,128.97

Common Mortgage Questions

What is PMI and do I need it?

Private Mortgage Insurance (PMI) is usually required if your down payment is less than 20% of the home's value. It protects the lender if you default. This calculator focuses on Principal and Interest; however, remember to budget for PMI, property taxes, and home insurance separately.

How does the loan term affect my payment?

A shorter term (like 15 years) results in higher monthly payments because you are paying off the debt faster. However, you will pay significantly less in total interest over the life of the loan compared to a 30-year term.

Should I pay more than the minimum?

Making extra payments toward your principal can drastically reduce the amount of interest you pay and help you own your home sooner. Even one extra payment per year can shave years off a standard 30-year mortgage.

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