A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial. This calculator helps estimate your principal and interest payment based on the loan amount, annual interest rate, and loan term.
The Formula Explained
The standard formula for calculating a fixed-rate mortgage payment (M) is as follows:
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 calculated by dividing your annual interest rate by 12. For example, if your annual rate is 6%, your monthly rate (i) would be 0.06 / 12 = 0.005.
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 a 30-year mortgage, n = 30 * 12 = 360.
How to Use This Calculator
Loan Amount: Enter the total amount you plan to borrow for your home.
Annual Interest Rate: Input the yearly interest rate offered by your lender. This is usually expressed as a percentage (e.g., 5.5%).
Loan Term (Years): Specify how many years you plan to take to repay the loan (e.g., 15, 30 years).
Click "Calculate Monthly Payment" to see your estimated P&I payment.
Important Considerations
The calculated monthly payment typically includes only principal and interest (P&I). Your actual total monthly housing expense will likely be higher and may include:
Property Taxes: Annual taxes on your property, usually paid monthly as part of your mortgage escrow.
Homeowners Insurance: Insurance to protect your property, also often paid monthly through escrow.
Private Mortgage Insurance (PMI): If your down payment is less than 20%, you may be required to pay PMI.
Homeowners Association (HOA) Fees: If applicable to your property.
This calculator provides a foundational estimate. It's always recommended to speak with a mortgage lender or financial advisor for a comprehensive understanding of your specific mortgage options and total costs.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var monthlyPaymentResult = document.getElementById("monthlyPayment");
// Clear previous results and error messages
monthlyPaymentResult.textContent = "$0.00";
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0) {
alert("Please enter a valid loan amount.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate <= 0) {
alert("Please enter a valid annual interest rate.");
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please enter a valid loan term in years.");
return;
}
// Calculations
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = 0;
// Handle the case where interest rate is 0
if (monthlyInterestRate === 0) {
monthlyPayment = loanAmount / numberOfPayments;
} else {
// Standard mortgage payment formula
var numerator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
monthlyPayment = loanAmount * (numerator / denominator);
}
// Display the result, formatted to two decimal places
monthlyPaymentResult.textContent = "$" + monthlyPayment.toFixed(2);
}