Estimate your potential monthly mortgage payment based on loan details.
Estimated Monthly Principal & Interest Payment:
$0.00
Understanding Your Mortgage Payment
A mortgage is a long-term loan used to finance the purchase of real estate. The monthly payment for a mortgage is typically composed of several parts, but the most significant components are the principal and interest (P&I). This calculator focuses on estimating this core P&I portion of your monthly housing expense.
How the Calculation Works (Principal & Interest)
The calculation for the monthly principal and interest payment uses the standard mortgage payment formula, which is derived from an annuity formula. The formula is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (Purchase Price – Down Payment)
i = Your monthly interest rate (Annual Interest Rate / 12 / 100)
n = The total number of payments over the loan's lifetime (Loan Term in Years * 12)
Key Factors Affecting Your Mortgage Payment:
Home Purchase Price: The total cost of the property you intend to buy. A higher price generally means a higher loan amount.
Down Payment: The upfront amount of cash you pay towards the purchase price. A larger down payment reduces the loan principal, thus lowering your monthly payment.
Annual Interest Rate: This is the yearly percentage charged by the lender. Even small differences in interest rates can significantly impact your monthly payment and the total interest paid over the life of the loan. It's influenced by market conditions, your credit score, and the loan type.
Loan Term: The duration over which you agree to repay the loan. Common terms are 15, 20, or 30 years. Shorter terms result in higher monthly payments but less total interest paid over time. Longer terms mean lower monthly payments but more interest paid overall.
What's Not Included (and Why It Matters):
This calculator provides an estimate for Principal and Interest (P&I) only. Your actual total monthly housing payment (often called PITI) will likely be higher because it usually includes:
Property Taxes: Annual taxes assessed by your local government on your property's value. Lenders often collect these monthly and hold them in an escrow account.
Homeowners Insurance: Insurance to protect against damage to your home. Lenders also typically require this to be paid via escrow.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's value, lenders usually require PMI to protect them against potential default. This adds to your monthly cost until you reach sufficient equity.
Homeowners Association (HOA) Fees: If your property is part of a community with an HOA, you'll have monthly or annual fees for shared amenities and maintenance.
It's crucial to factor these additional costs into your budget when determining true affordability.
Using This Calculator
Enter the details of a potential home purchase into the fields above. The calculator will provide an estimated monthly P&I payment. Experiment with different scenarios by adjusting the purchase price, down payment, interest rate, and loan term to understand how each affects your affordability. This tool is a great starting point for budgeting and pre-qualifying for a mortgage.
function calculateMortgage() {
var principalLoanAmount = 0;
var monthlyPayment = 0;
var homePrice = parseFloat(document.getElementById("homePrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTerm").value);
// Input validation
if (isNaN(homePrice) || homePrice <= 0) {
alert("Please enter a valid Home Purchase Price.");
return;
}
if (isNaN(downPayment) || downPayment < 0) {
alert("Please enter a valid Down Payment Amount.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
alert("Please enter a valid Annual Interest Rate.");
return;
}
if (isNaN(loanTermYears) || loanTermYears = homePrice) {
alert("Down Payment cannot be greater than or equal to the Home Purchase Price.");
return;
}
// Calculate principal loan amount
principalLoanAmount = homePrice – downPayment;
// Calculate monthly interest rate
var monthlyInterestRate = (annualInterestRate / 100) / 12;
// Calculate total number of payments
var numberOfPayments = loanTermYears * 12;
// Calculate monthly mortgage payment using the formula
if (monthlyInterestRate > 0) {
monthlyPayment = principalLoanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// Handle case where interest rate is 0%
monthlyPayment = principalLoanAmount / numberOfPayments;
}
// Display the result, formatted as currency
var formattedMonthlyPayment = "$" + monthlyPayment.toFixed(2);
document.getElementById("monthlyPayment").innerText = formattedMonthlyPayment;
}