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Payment Breakdown
Understanding Your Mortgage Repayments
Buying a home is one of the most significant financial decisions you will ever make. Using a mortgage repayment calculator helps you understand the long-term financial commitment before you sign on the dotted line. This tool calculates the principal and interest components of your monthly payment based on current market variables.
How is the Monthly Payment Calculated?
The standard formula for calculating monthly mortgage repayments is the amortization formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M: Total monthly payment.
P: Principal loan amount (Home price minus down payment).
i: Monthly interest rate (Annual rate divided by 12 months).
n: Total number of months in the loan term.
Realistic Example Case Study
Imagine you are purchasing a home for $450,000. You have saved a 20% down payment of $90,000, leaving you with a loan balance (principal) of $360,000. With a 30-year fixed rate of 7%:
Monthly Principal & Interest: $2,395.09
Total Interest Paid over 30 years: $502,232.40
Total Cost of Loan: $862,232.40
Note that this calculator focuses on the "Principal and Interest" (P&I). In a real-world scenario, your lender will also likely collect monthly amounts for property taxes, homeowners insurance, and potentially private mortgage insurance (PMI) if your down payment is less than 20%.
Tips to Lower Your Monthly Payment
Larger Down Payment: Increasing your down payment directly reduces the loan principal.
Improve Credit Score: Higher credit scores typically qualify for lower interest rates.
Extend Loan Term: Moving from a 15-year to a 30-year loan lowers the monthly payment, though it increases the total interest paid over time.
Refinancing: If market rates drop in the future, you can refinance to a lower interest rate.
function calculateMortgage() {
var homePrice = parseFloat(document.getElementById('homePrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var annualInterest = parseFloat(document.getElementById('interestRate').value);
var termYears = parseFloat(document.getElementById('loanTerm').value);
var resultArea = document.getElementById('mortgageResultArea');
var monthlyDisplay = document.getElementById('monthlyResult');
var totalRepayDisplay = document.getElementById('totalRepayment');
var totalInterestDisplay = document.getElementById('totalInterest');
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(annualInterest) || isNaN(termYears)) {
alert("Please enter valid numeric values for all fields.");
return;
}
var principal = homePrice – downPayment;
if (principal <= 0) {
monthlyDisplay.innerHTML = "$0.00";
totalRepayDisplay.innerHTML = "Your down payment covers the full price.";
totalInterestDisplay.innerHTML = "";
resultArea.style.display = "block";
return;
}
var monthlyInterest = (annualInterest / 100) / 12;
var numberOfPayments = termYears * 12;
var monthlyPayment = 0;
if (monthlyInterest === 0) {
monthlyPayment = principal / numberOfPayments;
} else {
var x = Math.pow(1 + monthlyInterest, numberOfPayments);
monthlyPayment = (principal * x * monthlyInterest) / (x – 1);
}
var totalRepayment = monthlyPayment * numberOfPayments;
var totalInterest = totalRepayment – principal;
monthlyDisplay.innerHTML = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " /mo";
totalRepayDisplay.innerHTML = "Total of " + (numberOfPayments) + " payments: $" + totalRepayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "";
totalInterestDisplay.innerHTML = "Total Interest Cost: $" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "";
resultArea.style.display = "block";
resultArea.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}