A mortgage is a significant financial commitment, and understanding how your monthly repayment is calculated is crucial for budgeting and financial planning. This calculator helps you estimate your principal and interest payments based on the loan amount, interest rate, and loan term.
The Mortgage Payment Formula
The standard formula used to calculate the fixed monthly payment (M) for a mortgage is derived from the annuity formula. It takes into account the principal loan amount (P), the monthly interest rate (r), and the total number of payments (n).
M = P [ r(1 + r)^n ] / [ (1 + r)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (the amount you borrow)
r = Your monthly interest rate. This is calculated by dividing your annual interest rate by 12. For example, if your annual rate is 6%, your monthly rate (r) is 0.06 / 12 = 0.005.
n = The total number of payments over the loan's lifetime. This is calculated by multiplying the number of years in your loan term by 12. For example, a 30-year mortgage has 30 * 12 = 360 payments.
How to Use This Calculator
Loan Amount: Enter the total amount of money you intend to borrow for your mortgage.
Annual Interest Rate: Input the yearly interest rate offered by your lender. Be sure to enter it as a percentage (e.g., 5.5 for 5.5%).
Loan Term (Years): Specify the duration of your mortgage in years (e.g., 15, 20, 30).
Click the "Calculate Monthly Payment" button.
The calculator will then display your estimated monthly principal and interest payment.
Important Considerations:
Additional Costs: This calculator estimates only the principal and interest (P&I) portion of your mortgage payment. Your actual monthly housing cost will likely be higher and may include property taxes, homeowner's insurance, and potentially Private Mortgage Insurance (PMI) or Homeowner Association (HOA) fees. These are often referred to as PITI (Principal, Interest, Taxes, Insurance).
Variable Rates: This calculator assumes a fixed interest rate for the entire loan term. If you have an adjustable-rate mortgage (ARM), your payments may change over time.
Fees: Loan origination fees, closing costs, and other lender charges are not included in this calculation.
Amortization: The monthly payment is calculated on an amortizing loan schedule, meaning each payment gradually reduces the principal balance over time, while also covering the interest accrued. Early payments consist of more interest, while later payments consist of more principal.
Use this tool as a starting point for understanding your mortgage obligations. It's always recommended to consult with a mortgage professional or financial advisor for personalized advice and a comprehensive understanding of all costs associated with your home loan.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result").querySelector("span");
// Clear previous results
resultDiv.textContent = "–";
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0) {
alert("Please enter a valid Loan Amount greater than zero.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
alert("Please enter a valid Annual Interest Rate (cannot be negative).");
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please enter a valid Loan Term in Years greater than zero.");
return;
}
// Calculate monthly interest rate
var monthlyInterestRate = annualInterestRate / 100 / 12;
// Calculate total number of payments
var numberOfPayments = loanTermYears * 12;
var monthlyPayment;
if (monthlyInterestRate === 0) {
// Handle zero interest rate case to avoid division by zero
monthlyPayment = loanAmount / numberOfPayments;
} else {
// Calculate monthly payment using the standard mortgage formula
var numerator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
monthlyPayment = loanAmount * (numerator / denominator);
}
// Display the result, formatted to two decimal places
resultDiv.textContent = "$" + monthlyPayment.toFixed(2);
}