A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial. In the United States, the most common type of mortgage is a fixed-rate mortgage, where the interest rate remains the same for the entire life of the loan. This calculator helps you estimate the principal and interest portion of your monthly mortgage payment.
How is the Monthly Payment Calculated?
The standard formula used to calculate the monthly payment (M) for a fixed-rate mortgage is:
$M = P \frac{r(1+r)^n}{(1+r)^n – 1}$
Where:
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (the amount you borrow)
r = Your monthly interest rate. This is your annual interest rate divided by 12. (e.g., if your annual rate is 3.5%, then r = 0.035 / 12)
n = The total number of payments over the loan's lifetime. This is your loan term in years multiplied by 12. (e.g., for a 30-year loan, n = 30 * 12 = 360)
Example Breakdown:
Let's say you take out a mortgage for $300,000 at an annual interest rate of 3.5% for 30 years.
This calculation yields approximately $1,347.13. This is the principal and interest portion of your monthly payment.
Important Considerations:
This calculator provides an estimate for the principal and interest (P&I) portion of your mortgage payment. Your actual total monthly housing expense will likely be higher and typically includes:
Property Taxes: Funds set aside to pay local property taxes.
Homeowners Insurance: Funds set aside to pay your homeowner's insurance policy.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's purchase price, you'll likely pay PMI.
HOA Fees: If applicable, for homeowners association dues.
These additional costs are often included in your monthly payment and are held in an escrow account by your lender. It's essential to factor these into your overall budget when purchasing a home.
Use this calculator as a tool to understand the core component of your mortgage payment and to compare different loan scenarios. Consult with a mortgage professional for personalized advice and a comprehensive understanding of all associated costs.
function calculateMortgage() {
var loanAmountInput = document.getElementById("loanAmount");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var monthlyPaymentOutput = document.getElementById("monthlyPayment");
var resultContainer = document.getElementById("result-container");
var principal = parseFloat(loanAmountInput.value);
var annualInterestRate = parseFloat(interestRateInput.value);
var loanTermYears = parseFloat(loanTermInput.value);
// Input validation
if (isNaN(principal) || principal <= 0) {
alert("Please enter a valid Loan Amount.");
loanAmountInput.focus();
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
alert("Please enter a valid Annual Interest Rate.");
interestRateInput.focus();
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please enter a valid Loan Term in Years.");
loanTermInput.focus();
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment;
if (monthlyInterestRate === 0) {
monthlyPayment = principal / numberOfPayments;
} else {
monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
// Format the output to two decimal places and add comma separators
monthlyPaymentOutput.textContent = "$" + monthlyPayment.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
resultContainer.style.display = "block";
}