Calculate your estimated monthly mortgage payment. Enter the loan details below.
Your Estimated Monthly Payment
$0.00
Understanding Your Mortgage Monthly Payment
A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial for budgeting and financial planning. The primary components of your monthly mortgage payment include principal and interest (P&I). However, many homeowners also include property taxes and homeowner's insurance in their monthly escrow payment, which is often collected by the lender.
The Formula for Principal and Interest (P&I)
The most common formula used to calculate the monthly mortgage payment (P&I) is based on an amortizing loan calculation. The formula is:
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 your annual interest rate divided by 12. For example, if your annual rate is 6%, your monthly rate is 0.06 / 12 = 0.005.
n = The total number of payments over the loan's lifetime. This is the loan term in years multiplied by 12. For example, a 30-year mortgage has 30 * 12 = 360 payments.
How the Calculator Works
This calculator takes the values you input for the Loan Amount (P), Annual Interest Rate, and Loan Term (in years), and applies the formula above.
It converts the Annual Interest Rate into a monthly interest rate (i) by dividing by 100 (to convert percentage to decimal) and then by 12.
It calculates the total number of payments (n) by multiplying the Loan Term (in years) by 12.
It then plugs these values, along with the Loan Amount (P), into the standard mortgage payment formula to compute the monthly P&I payment.
Factors Not Included (But Important to Consider)
It's important to note that this calculator typically computes only the Principal and Interest (P&I) portion of your mortgage payment. Your actual total monthly housing cost might be higher due to:
Property Taxes: Assessed by your local government.
Homeowner's Insurance: Required by lenders to protect against damage.
Private Mortgage Insurance (PMI): Often required if your down payment is less than 20%.
Homeowners Association (HOA) Dues: If applicable.
Lenders often bundle these costs into an escrow account, and you pay them as part of your total monthly payment. Always discuss the full estimated costs with your lender.
Use Cases
This calculator is useful for:
Prospective Homebuyers: To estimate affordability and budget for a new home.
Refinancing Decisions: To compare potential new mortgage payments against current ones.
Financial Planning: To understand the long-term cost of borrowing.
function calculateMonthlyPayment() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
var resultValue = document.getElementById("result-value");
// Input validation
if (isNaN(loanAmount) || isNaN(interestRate) || isNaN(loanTerm) || loanAmount <= 0 || interestRate < 0 || loanTerm <= 0) {
alert("Please enter valid positive numbers for all fields.");
resultDiv.style.display = 'none';
return;
}
// Convert annual interest rate to monthly interest rate
var monthlyInterestRate = (interestRate / 100) / 12;
// Convert loan term in years to number of months
var numberOfPayments = loanTerm * 12;
var monthlyPayment = 0;
// Handle the case where interest rate is 0
if (monthlyInterestRate === 0) {
monthlyPayment = loanAmount / numberOfPayments;
} else {
// Calculate monthly payment using the mortgage payment formula
var numerator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
monthlyPayment = loanAmount * (numerator / denominator);
}
// Display the result, formatted to two decimal places
resultValue.innerText = "$" + monthlyPayment.toFixed(2);
resultDiv.style.display = 'block';
}