function calculateMortgage() {
// 1. Get Input Values
var homePrice = parseFloat(document.getElementById('homePrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var loanTerm = parseFloat(document.getElementById('loanTerm').value);
var annualTax = parseFloat(document.getElementById('annualTax').value);
var annualInsurance = parseFloat(document.getElementById('annualInsurance').value);
var errorDiv = document.getElementById('errorMessage');
var resultDiv = document.getElementById('calcResult');
// 2. Validate Inputs
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(annualTax) || isNaN(annualInsurance)) {
errorDiv.style.display = 'block';
resultDiv.style.display = 'none';
return;
}
if (homePrice <= 0 || loanTerm <= 0) {
errorDiv.style.display = 'block';
errorDiv.innerText = "Price and Term must be greater than zero.";
resultDiv.style.display = 'none';
return;
}
errorDiv.style.display = 'none';
// 3. Calculation Logic
var loanAmount = homePrice – downPayment;
// Monthly interest rate
var monthlyRate = (interestRate / 100) / 12;
// Total number of payments
var numberOfPayments = loanTerm * 12;
// Calculate Monthly Principal & Interest (P&I)
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyPI = 0;
if (monthlyRate === 0) {
monthlyPI = loanAmount / numberOfPayments;
} else {
monthlyPI = loanAmount * ( (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1) );
}
// Calculate Monthly Tax and Insurance
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
// Total Monthly Payment
var totalMonthlyPayment = monthlyPI + monthlyTax + monthlyInsurance;
// 4. Update DOM
document.getElementById('resPrincipalInterest').innerText = '$' + monthlyPI.toFixed(2);
document.getElementById('resTax').innerText = '$' + monthlyTax.toFixed(2);
document.getElementById('resInsurance').innerText = '$' + monthlyInsurance.toFixed(2);
document.getElementById('resTotal').innerText = '$' + totalMonthlyPayment.toFixed(2);
resultDiv.style.display = 'block';
}
Understanding Your Mortgage Calculation
Buying a home is one of the largest financial decisions you will make, and understanding the components of your monthly mortgage payment is crucial for budgeting. This Mortgage Payment Calculator helps you estimate not just the loan repayment, but the carrying costs of the property.
The PITI Components
Most mortgage payments are comprised of four main parts, commonly referred to by the acronym PITI:
Principal: The portion of your payment that goes toward paying down the loan balance (the $).
Interest: The cost of borrowing money from your lender. In the early years of a standard 30-year fixed mortgage, the majority of your payment goes toward interest.
Taxes: Property taxes assessed by your local government. These are usually held in escrow by your lender and paid annually or semi-annually on your behalf.
Insurance: Homeowners insurance protects your property against hazards. Like taxes, this is often escrowed into your monthly payment.
How Interest Rates Affect Your Payment
Even a small change in interest rates can significantly impact your monthly payment and the total cost of the loan. For example, on a $300,000 loan, a 1% increase in interest rate can raise the monthly payment by hundreds of dollars and the total interest paid over 30 years by nearly $70,000.
Loan Term: 15-Year vs. 30-Year
Choosing the right loan term is a trade-off between monthly cash flow and total interest costs:
30-Year Term: Offers lower monthly payments, making the home more affordable on a monthly basis, but you will pay significantly more in interest over the life of the loan.
15-Year Term: Requires higher monthly payments, but you build equity much faster and usually secure a lower interest rate, saving a substantial amount in long-term interest.
What About PMI?
If your down payment is less than 20% of the home price, lenders typically require Private Mortgage Insurance (PMI). This calculator focuses on PITI, but you should budget an additional 0.5% to 1% of the loan amount annually for PMI until you reach 20% equity.
How to Lower Your Monthly Payment
If the estimated payment is higher than your budget allows, consider these strategies:
Increase Your Down Payment: This lowers the principal loan amount and may eliminate the need for PMI.
Shop for Lower Insurance: Homeowners insurance rates vary; compare quotes from different providers.
Improve Your Credit Score: A higher credit score often qualifies you for a lower interest rate.
Consider "Points": You can sometimes pay an upfront fee (points) to lower the interest rate on the mortgage.