A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial for budgeting and financial planning. This calculator helps you estimate your principal and interest payment for a standard fixed-rate mortgage.
The Formula Behind the Calculation
The monthly payment (M) for a fixed-rate mortgage is calculated using the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (principal and interest)
P = The principal loan amount (the total amount you borrow)
i = Your monthly interest rate. This is your annual interest rate divided by 12. For example, if your annual rate is 3.5%, your monthly rate (i) is 0.035 / 12.
n = The total number of payments over the loan's lifetime. This is the loan term in years multiplied by 12. For a 30-year mortgage, n = 30 * 12 = 360.
How to Use This Calculator
To get your estimated monthly mortgage payment, follow these steps:
Loan Amount: Enter the total amount of money you plan to borrow for your home.
Annual Interest Rate: Input the annual interest rate offered by your lender. This is usually expressed as a percentage (e.g., 3.5%).
Loan Term (Years): Specify the duration of the loan in years (e.g., 15, 30).
Calculate: Click the "Calculate Monthly Payment" button.
The calculator will then display your estimated monthly payment, covering only the principal and interest.
Important Considerations
This calculator provides an estimate for the principal and interest (P&I) portion of your mortgage payment. Your actual total monthly housing cost will likely be higher and typically includes:
Property Taxes: Annual taxes divided by 12.
Homeowner's Insurance: Annual premium divided by 12.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's value, you may be required to pay PMI.
Homeowner Association (HOA) Fees: If applicable to your property.
Always consult with your mortgage lender for a precise breakdown of all costs associated with your specific loan. Factors like closing costs, loan origination fees, and potential changes in interest rates (for adjustable-rate mortgages) are not included in this basic calculation.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var monthlyPaymentElement = document.getElementById("monthlyPayment");
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
monthlyPaymentElement.innerText = "Please enter valid numbers.";
return;
}
// Convert annual interest rate to monthly interest rate
var monthlyInterestRate = annualInterestRate / 100 / 12;
// Calculate the total number of payments
var numberOfPayments = loanTermYears * 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 formula
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
// Format the monthly payment to two decimal places
monthlyPaymentElement.innerText = "$" + monthlyPayment.toFixed(2);
}