Securing a home is one of the biggest financial decisions you'll make.
A crucial part of this process is understanding your mortgage payments.
This calculator helps you estimate your monthly principal and interest payment
based on the loan amount, annual interest rate, and the term of the loan.
How the Calculation Works
The monthly mortgage payment (M) is calculated using the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (the amount you borrow)
i = Your monthly interest rate. This is calculated by dividing your Annual Interest Rate by 12. For example, a 4.5% annual rate becomes 0.045 / 12 = 0.00375 monthly.
n = The total number of payments over the loan's lifetime. This is calculated by multiplying your Loan Term in years by 12. For a 30-year loan, n = 30 * 12 = 360 payments.
Example Calculation
Let's say you are taking out a mortgage with the following details:
Loan Amount (P): $300,000
Annual Interest Rate: 5.0%
Loan Term: 25 years
First, we convert the annual interest rate to a monthly rate (i):
i = 5.0% / 12 = 0.05 / 12 ≈ 0.00416667
Next, we calculate the total number of payments (n):
n = 25 years * 12 months/year = 300
So, the estimated monthly payment for this loan would be approximately $1,756.42.
This calculation covers only the principal and interest. Remember that your actual total monthly housing cost will likely include property taxes, homeowner's insurance, and potentially private mortgage insurance (PMI), making your total out-of-pocket expense higher.
function calculateLoan() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var monthlyPaymentElement = document.getElementById("monthlyPayment");
if (isNaN(loanAmount) || isNaN(interestRate) || isNaN(loanTerm) || loanAmount <= 0 || interestRate < 0 || loanTerm <= 0) {
monthlyPaymentElement.textContent = "Please enter valid numbers.";
monthlyPaymentElement.style.color = "#dc3545";
return;
}
var monthlyInterestRate = interestRate / 100 / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
monthlyPaymentElement.textContent = "Calculation error. Please check inputs.";
monthlyPaymentElement.style.color = "#dc3545";
} else {
monthlyPaymentElement.textContent = "$" + monthlyPayment.toFixed(2);
monthlyPaymentElement.style.color = "#28a745";
}
}