This calculator provides an estimate. Consult a financial advisor for precise figures.
Estimated Monthly Payment
$0.00
Understanding Your Home Loan Calculation
A home loan, also known as a mortgage, is a loan used to finance the purchase of a home. The monthly payment you make on a home loan typically includes repayment of the principal amount borrowed and the interest charged by the lender. This calculator helps you estimate your monthly mortgage payment based on three key factors: the loan amount, the annual interest rate, and the loan term.
The Math Behind the Mortgage Payment
The calculation for a fixed-rate mortgage payment uses the following standard formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal and Interest)
P = The principal loan amount (the total amount you borrow)
i = Your monthly interest rate. This is calculated by dividing your annual interest rate by 12 (e.g., 5% annual rate / 12 months = 0.05 / 12 = 0.004167 monthly rate)
n = The total number of payments over the loan's lifetime. This is calculated by multiplying your loan term in years by 12 (e.g., a 30-year loan has 30 * 12 = 360 payments)
How to Use This Calculator
1. Loan Amount: Enter the total amount of money you plan to borrow for your home purchase. This is the purchase price minus your down payment.
2. Annual Interest Rate: Input the yearly interest rate offered by your lender. Be sure to use the percentage value (e.g., 5 for 5%).
3. Loan Term (Years): Specify the duration of your loan in years. Common terms are 15, 20, or 30 years.
After entering these details, click the "Calculate Monthly Payment" button. The calculator will then display your estimated principal and interest payment per month. Remember that this figure does not include property taxes, homeowner's insurance, or potential Private Mortgage Insurance (PMI), which will increase your actual total monthly housing cost.
Why This Matters
Understanding your estimated monthly mortgage payment is crucial for several reasons:
Budgeting: It helps you determine if a particular home price fits your monthly budget.
Financial Planning: Knowing this figure allows you to plan for other expenses and savings goals.
Negotiation: Being informed about loan terms can empower you during negotiations with lenders.
Use this calculator as a starting point to explore different loan scenarios and get a clearer picture of your potential homeownership costs.
function calculateMonthlyPayment() {
var loanAmountInput = document.getElementById("loanAmount");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var monthlyPaymentDisplay = document.getElementById("monthlyPayment");
var principal = parseFloat(loanAmountInput.value);
var annualRate = parseFloat(interestRateInput.value);
var years = parseFloat(loanTermInput.value);
// Basic validation to prevent NaN results
if (isNaN(principal) || isNaN(annualRate) || isNaN(years) || principal <= 0 || annualRate < 0 || years <= 0) {
monthlyPaymentDisplay.innerText = "Invalid input. Please enter positive numbers.";
return;
}
var monthlyRate = (annualRate / 100) / 12;
var numberOfPayments = years * 12;
var monthlyPayment = 0;
if (monthlyRate === 0) { // Handle zero interest rate case
monthlyPayment = principal / numberOfPayments;
} else {
monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Format the output to two decimal places
monthlyPaymentDisplay.innerText = "$" + monthlyPayment.toFixed(2);
}