function calculateMortgage() {
var homePriceInput = document.getElementById('homePrice');
var downPaymentInput = document.getElementById('downPayment');
var interestRateInput = document.getElementById('interestRate');
var loanTermInput = document.getElementById('loanTerm');
var resultDiv = document.getElementById('mortgageResult');
var homePrice = parseFloat(homePriceInput.value);
var downPayment = parseFloat(downPaymentInput.value);
var interestRate = parseFloat(interestRateInput.value);
var loanTerm = parseInt(loanTermInput.value);
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
alert("Please fill in all fields with valid numbers.");
resultDiv.style.display = 'none';
return;
}
if (downPayment >= homePrice) {
alert("Down payment cannot be equal to or greater than the home price.");
resultDiv.style.display = 'none';
return;
}
var principal = homePrice – downPayment;
var monthlyRate = interestRate / 100 / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPayment = 0;
if (interestRate === 0) {
monthlyPayment = principal / numberOfPayments;
} else {
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
monthlyPayment = principal * ( (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1) );
}
var totalCost = monthlyPayment * numberOfPayments;
var totalInterest = totalCost – principal;
// Formatter for currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('monthlyPaymentDisplay').innerHTML = formatter.format(monthlyPayment);
document.getElementById('loanAmountDisplay').innerHTML = formatter.format(principal);
document.getElementById('totalInterestDisplay').innerHTML = formatter.format(totalInterest);
document.getElementById('totalCostDisplay').innerHTML = formatter.format(totalCost);
resultDiv.style.display = 'block';
}
Understanding Your Mortgage Calculation
Purchasing a home is likely the largest financial commitment you will make in your lifetime. Understanding how your mortgage payments are calculated is crucial for budgeting and financial planning. This Mortgage Payment Calculator breaks down the principal and interest portion of your loan to help you determine affordability.
How the Mortgage Formula Works
Mortgage amortization allows you to pay off your loan over a set period (the loan term) with regular monthly payments. While your total monthly payment amount remains constant (for fixed-rate mortgages), the composition of that payment changes over time.
Principal: The money you borrowed to buy the house (Home Price minus Down Payment).
Interest: The fee the lender charges you for borrowing that money.
In the early years of your loan, a large portion of your payment goes toward interest. As you slowly reduce the principal balance, the interest charge decreases, and more of your payment goes toward equity.
Key Factors Affecting Your Payment
When using this calculator, consider how small changes can impact your monthly obligation:
Down Payment: putting more money down upfront reduces the Principal, which lowers both your monthly payment and the total interest paid over the life of the loan. A down payment of less than 20% may also trigger Private Mortgage Insurance (PMI), which is an extra cost not calculated here.
Interest Rate: Even a 0.5% difference in your interest rate can save or cost you tens of thousands of dollars over a 30-year term. Rates are determined by your credit score, the economy, and the loan type.
Loan Term: A 15-year mortgage will have higher monthly payments than a 30-year mortgage, but you will pay significantly less in total interest because the money is borrowed for a shorter time.
Example Calculation
Let's look at a realistic scenario. If you buy a home for $350,000 and make a $70,000 (20%) down payment, your loan amount is $280,000.
With a 30-year fixed rate of 6.5%:
Your monthly Principal & Interest payment would be roughly $1,769.
Over 30 years, you would pay approximately $357,000 in interest alone.
The total cost of the loan would be over $637,000.
Use the calculator above to simulate different down payments and interest rates to see what fits your monthly budget best.