Your estimated monthly mortgage payment will appear here.
Understanding Your Mortgage Payment
A mortgage is a loan used to purchase real estate, where the property itself serves as collateral for the lender. The monthly mortgage payment typically consists of four main components, often referred to as PITI:
Principal: The amount borrowed.
Interest: The cost of borrowing money.
Taxes: Property taxes levied by local governments.
Insurance: Homeowners insurance and potentially Private Mortgage Insurance (PMI) if your down payment is less than 20%.
This calculator focuses on the principal and interest (P&I) portion of your monthly mortgage payment, which is determined by the loan amount, interest rate, and loan term.
How the Calculation Works (Principal & Interest)
The standard formula for calculating the monthly payment (M) for a mortgage is an annuity formula:
$M = P \left[ \frac{i(1+i)^n}{(1+i)^n – 1} \right]$
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 calculated by dividing your annual interest rate by 12. For example, a 4.5% annual rate becomes 0.045 / 12 = 0.00375 per month.
n = The total number of payments over the loan's lifetime. This is calculated by multiplying the number of years in your loan term by 12. For example, a 30-year mortgage has 30 * 12 = 360 payments.
Example:
Let's say you are borrowing $300,000 (P) with an annual interest rate of 4.5% and a loan term of 30 years.
So, the estimated monthly principal and interest payment would be approximately $1,524.75.
Disclaimer: This calculator provides an estimate for principal and interest payments only. It does not include property taxes, homeowners insurance, or other potential fees, which will increase your actual total monthly housing expense. Consult with a mortgage professional for precise figures and advice tailored to your financial situation.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultElement = document.getElementById("result");
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || loanAmount <= 0 || annualInterestRate < 0 || loanTermYears 0) {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// If interest rate is 0, payment is just principal divided by number of months
monthlyPayment = loanAmount / numberOfPayments;
}
if (isNaN(monthlyPayment) || monthlyPayment < 0) {
resultElement.innerHTML = 'Calculation error. Please check your inputs.';
return;
}
resultElement.innerHTML = 'Estimated Monthly P&I: $' + monthlyPayment.toFixed(2) + '';
}