Buying a home is one of the largest financial decisions you will ever make. Using a reliable Mortgage Calculator is essential to ensure you understand your monthly financial obligations before signing the dotted line. This tool breaks down your monthly payments into principal, interest, taxes, and insurance (PITI) to give you a clear picture of affordability.
How the Mortgage Formula Works
While our calculator handles the heavy lifting instantly, understanding the math behind your mortgage can help you negotiate better terms. The standard formula for calculating your monthly principal and interest payment is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M: Total monthly payment.
P: The principal loan amount (Home Price minus Down Payment).
i: Monthly interest rate (Annual rate divided by 12).
n: Number of payments over the loan's lifetime (Years multiplied by 12).
Key Factors Affecting Your Monthly Payment
Several variables influence how much you pay every month. Adjusting these inputs in the calculator above can demonstrate significant savings:
Down Payment: putting more money down upfront reduces your principal loan amount (P) and often eliminates the need for Private Mortgage Insurance (PMI), lowering your monthly burden.
Interest Rate: Even a 0.5% difference in your rate can save—or cost—you tens of thousands of dollars over the life of a 30-year loan. Improving your credit score is the best way to secure a lower rate.
Loan Term: A 15-year term will have higher monthly payments compared to a 30-year term, but you will pay significantly less in total interest.
Taxes & Insurance: Often overlooked, property taxes and homeowners insurance are usually escrowed into your monthly payment. These costs vary wildly by location and property type.
What is Included in the Estimated Payment?
This calculator provides a comprehensive view known as PITI:
Principal: The portion paying down the loan balance.
Interest: The cost of borrowing the money.
Taxes: Estimated property taxes prorated monthly.
Insurance: Homeowners insurance prorated monthly.
HOA Fees: If you are buying a condo or in a managed community, Homeowners Association fees are added to your monthly recurring costs.
function calculateMortgage() {
// 1. Get Input Values
var priceInput = document.getElementById('mc-price');
var downInput = document.getElementById('mc-down');
var termInput = document.getElementById('mc-term');
var rateInput = document.getElementById('mc-rate');
var taxInput = document.getElementById('mc-tax');
var insInput = document.getElementById('mc-insurance');
var hoaInput = document.getElementById('mc-hoa');
// 2. Parse values and handle validation
var homePrice = parseFloat(priceInput.value);
var downPayment = parseFloat(downInput.value);
var years = parseFloat(termInput.value);
var annualRate = parseFloat(rateInput.value);
// Optional fields default to 0 if empty or invalid
var annualTax = parseFloat(taxInput.value);
if (isNaN(annualTax)) annualTax = 0;
var annualIns = parseFloat(insInput.value);
if (isNaN(annualIns)) annualIns = 0;
var monthlyHOA = parseFloat(hoaInput.value);
if (isNaN(monthlyHOA)) monthlyHOA = 0;
// Validate main inputs
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(years) || isNaN(annualRate) || homePrice <= 0 || years <= 0) {
alert("Please enter valid positive numbers for Home Price, Down Payment, Term, and Interest Rate.");
return;
}
// 3. Calculation Logic
var principal = homePrice – downPayment;
// Convert rate to decimal per month
var monthlyRate = (annualRate / 100) / 12;
var numberOfPayments = years * 12;
var monthlyPI = 0;
// Edge case: 0% interest
if (annualRate === 0) {
monthlyPI = principal / numberOfPayments;
} else {
// Mortgage Formula: M = P[r(1+r)^n/((1+r)^n)-1)]
monthlyPI = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Calculate other components
var monthlyTax = annualTax / 12;
var monthlyIns = annualIns / 12;
var totalMonthly = monthlyPI + monthlyTax + monthlyIns + monthlyHOA;
var totalCost = (monthlyPI * numberOfPayments) + downPayment;
// Note: Total cost usually refers to principal + interest paid.
// Let's show Total Paid to Bank (Principal + Interest)
var totalPaidToBank = monthlyPI * numberOfPayments;
var totalInterest = totalPaidToBank – principal;
// 4. Update DOM
document.getElementById('res-monthly').innerText = "$" + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-pi').innerText = "$" + monthlyPI.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-total-int').innerText = "$" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('res-total-cost').innerText = "$" + totalPaidToBank.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
// Show results container
document.getElementById('mc-results').style.display = "block";
}