A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial. This calculator helps you estimate the principal and interest portion of your monthly mortgage payment. It's important to note that this calculation typically does not include property taxes, homeowner's insurance, or private mortgage insurance (PMI), which are often included in your total monthly housing expense (known as PITI).
The Math Behind the Mortgage Payment
The formula used to calculate the monthly mortgage payment (M) is a standard annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (principal and interest)
P = The principal loan amount (the total amount you borrow)
i = Your monthly interest rate. This is your annual interest rate divided by 12. For example, if your annual rate is 3.5%, your monthly rate is 0.035 / 12 = 0.00291667.
n = The total number of payments over the loan's lifetime. This is your loan term in years multiplied by 12. For a 30-year mortgage, n = 30 * 12 = 360.
How to Use This Calculator
1. Loan Amount: Enter the total amount you plan to borrow for your home.
2. Annual Interest Rate: Enter the interest rate offered by your lender as a percentage (e.g., 3.5 for 3.5%).
3. Loan Term (Years): Enter the duration of your mortgage in years (e.g., 15 or 30).
Clicking "Calculate Monthly Payment" will provide an estimate based on the inputs you've provided.
Why This Matters
Knowing your estimated monthly principal and interest payment helps you:
Budget effectively: Understand a core component of your future housing costs.
Compare loan offers: Easily see how different interest rates and loan terms affect your payment.
Determine affordability: Gauge whether a particular home price fits within your budget.
Remember to factor in other costs like property taxes, insurance, and potential HOA fees to get a complete picture of your total monthly housing expense.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0) {
resultDiv.innerHTML = "Please enter a valid loan amount.";
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
resultDiv.innerHTML = "Please enter a valid annual interest rate.";
return;
}
if (isNaN(loanTerm) || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter a valid loan term in years.";
return;
}
// Convert annual interest rate to monthly interest rate
var monthlyInterestRate = annualInterestRate / 100 / 12;
// Calculate the total number of payments
var numberOfPayments = loanTerm * 12;
var monthlyPayment;
// Handle the case of 0% interest rate to avoid division by zero
if (monthlyInterestRate === 0) {
monthlyPayment = loanAmount / numberOfPayments;
} else {
// Calculate monthly payment using the mortgage formula
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
// Format the result to two decimal places and add currency symbol
var formattedMonthlyPayment = "$" + monthlyPayment.toFixed(2);
resultDiv.innerHTML = "Your estimated monthly payment is: " + formattedMonthlyPayment + "";
}