function calculateMortgage() {
// Get input values
var homePrice = parseFloat(document.getElementById("homePrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var propertyTax = parseFloat(document.getElementById("propertyTax").value);
var homeInsurance = parseFloat(document.getElementById("homeInsurance").value);
// Validation
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
alert("Please fill in all required fields with valid numbers.");
return;
}
// Handle optional fields if empty (treat as 0)
if (isNaN(propertyTax)) propertyTax = 0;
if (isNaN(homeInsurance)) homeInsurance = 0;
// Core Calculations
var principal = homePrice – downPayment;
// Handle negative principal
if (principal <= 0) {
alert("Down payment cannot be greater than or equal to the home price.");
return;
}
// Monthly Interest Rate
var monthlyRate = (interestRate / 100) / 12;
// Total number of payments
var numberOfPayments = loanTerm * 12;
// Mortgage Calculation Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var monthlyPI = 0;
if (interestRate === 0) {
monthlyPI = principal / numberOfPayments;
} else {
var x = Math.pow(1 + monthlyRate, numberOfPayments);
monthlyPI = (principal * x * monthlyRate) / (x – 1);
}
var monthlyTax = propertyTax / 12;
var monthlyIns = homeInsurance / 12;
var totalMonthly = monthlyPI + monthlyTax + monthlyIns;
// Display Results
document.getElementById("totalMonthlyDisplay").innerHTML = "$" + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("piDisplay").innerHTML = "$" + monthlyPI.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("taxDisplay").innerHTML = "$" + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("insDisplay").innerHTML = "$" + monthlyIns.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("loanAmountDisplay").innerHTML = "$" + principal.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
// Show result box
document.getElementById("resultBox").classList.add("active");
}
Understanding Your Mortgage PITI
When calculating mortgage affordability, many homebuyers make the mistake of looking only at the principal and interest payments. However, a true estimation of your monthly housing costs must include PITI: Principal, Interest, Taxes, and Insurance.
1. Principal and Interest (P&I)
This is the core of your mortgage payment. The principal pays down your loan balance, while the interest is the cost of borrowing money from your lender. In the early years of a standard 30-year fixed mortgage, a large portion of your payment goes toward interest. Over time, more of the payment is applied to the principal, building your equity faster.
2. Property Taxes
Local governments collect property taxes to fund schools, police, and public services. These are typically assessed annually based on your home's value. Lenders often collect this amount monthly and hold it in an escrow account to pay the bill when it comes due. Our calculator divides your annual tax input by 12 to show the monthly impact.
3. Homeowners Insurance
Lenders require homeowners insurance to protect the asset (your home) against fire, theft, and other damages. Like property taxes, this is usually broken down into monthly payments and added to your mortgage bill.
How Interest Rates Affect Affordability
Even a small fluctuation in interest rates can significantly impact your buying power. For example, on a $400,000 loan, a 1% increase in interest rate can raise your monthly payment by hundreds of dollars. Use this calculator to experiment with different rates and see how they change your total monthly obligation.
Tips for Lowering Your Payment
- Increase your down payment: This lowers the principal loan amount and may eliminate the need for Private Mortgage Insurance (PMI).
- Improve your credit score: A higher credit score often qualifies you for a lower interest rate.
- Shop for insurance: Homeowners insurance rates vary by provider. Shopping around can save you money on your monthly PITI.