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Understanding Your Monthly Mortgage Payment
Buying a home is a significant financial decision, and understanding your monthly mortgage payment is crucial for budgeting and financial planning. This calculator helps you estimate your principal and interest payment, taking into account the home price, your down payment, the loan term, and the annual interest rate.
How the Calculation Works:
The monthly mortgage payment (M) is calculated using the following formula, which is derived from the standard annuity 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. This is calculated as the Home Price minus your Down Payment.
i = Your monthly interest rate. This is calculated by dividing your Annual Interest Rate by 12. For example, if your annual rate is 4.5%, then i = 0.045 / 12 = 0.00375.
n = The total number of payments over the loan's lifetime. This is calculated by multiplying the Loan Term (in Years) by 12. For a 30-year mortgage, n = 30 * 12 = 360.
Example Calculation:
Let's say you are buying a home for $300,000 and make a down payment of $60,000.
Home Price: $300,000
Down Payment: $60,000
Principal Loan Amount (P): $300,000 – $60,000 = $240,000
So, the estimated monthly principal and interest payment would be approximately $1,229.19.
Important Considerations:
This calculator provides an estimate for the principal and interest portion of your mortgage payment. It does NOT include:
Property Taxes
Homeowner's Insurance
Private Mortgage Insurance (PMI), if applicable (usually if your down payment is less than 20%)
Homeowner Association (HOA) Dues
These additional costs are often included in your total monthly housing expense, commonly referred to as PITI (Principal, Interest, Taxes, and Insurance). Always consult with a mortgage lender for a precise quote and to understand all costs associated with your home loan.
function calculateMortgagePayment() {
var homePrice = parseFloat(document.getElementById("homePrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var loanTermYears = parseInt(document.getElementById("loanTerm").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var resultDisplay = document.getElementById("result");
if (isNaN(homePrice) || homePrice <= 0) {
resultDisplay.textContent = "Please enter a valid Home Price.";
return;
}
if (isNaN(downPayment) || downPayment homePrice) {
resultDisplay.textContent = "Down Payment cannot exceed Home Price.";
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
resultDisplay.textContent = "Please select a valid Loan Term.";
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
resultDisplay.textContent = "Please enter a valid Annual Interest Rate.";
return;
}
var principalLoanAmount = homePrice – downPayment;
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = 0;
if (monthlyInterestRate === 0) { // Handle 0% interest rate case
monthlyPayment = principalLoanAmount / numberOfPayments;
} else {
monthlyPayment = principalLoanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
resultDisplay.textContent = "Calculation error. Check inputs.";
} else {
resultDisplay.textContent = "$" + monthlyPayment.toFixed(2);
}
}