A mortgage is a significant financial commitment, and understanding your monthly repayments is crucial for budgeting and financial planning. This calculator helps you estimate your regular payment amount based on the loan principal, the annual interest rate, and the loan term.
How Mortgage Repayments Are Calculated
The most common formula used for calculating mortgage repayments is the annuity formula. It takes into account the loan amount, the interest rate, and the loan duration to determine a fixed periodic payment. The formula for the monthly repayment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount (the total amount borrowed)
i = Monthly interest rate (annual interest rate divided by 12)
n = Total number of payments (loan term in years multiplied by 12)
Example Calculation:
Let's say you want to borrow $300,000 for a home with an annual interest rate of 3.5% over a term of 30 years.
P = $300,000
Annual Interest Rate = 3.5% = 0.035
i (Monthly Interest Rate) = 0.035 / 12 ≈ 0.00291667
Loan Term = 30 years
n (Total Number of Payments) = 30 years * 12 months/year = 360
This means your estimated monthly mortgage repayment would be approximately $1,356.87.
Factors Affecting Your Mortgage Repayments
Loan Amount: A larger loan amount will result in higher monthly payments.
Interest Rate: Even small changes in the interest rate can significantly impact your monthly payments and the total interest paid over the life of the loan.
Loan Term: A longer loan term will result in lower monthly payments but more interest paid overall. A shorter term means higher monthly payments but less interest paid.
Type of Mortgage: This calculator assumes a fixed-rate mortgage. Adjustable-rate mortgages (ARMs) have payments that can change over time.
Additional Fees: This calculation typically excludes property taxes, homeowners insurance, and private mortgage insurance (PMI), which are often included in your total monthly housing expense.
Use this calculator as a guide to understand the core repayment cost of your potential mortgage. Always consult with a financial advisor or mortgage lender for personalized advice and precise figures.
function calculateRepayments() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultElement = document.getElementById("result");
var currencyElement = resultElement.querySelector('.currency');
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || loanAmount <= 0 || annualInterestRate < 0 || loanTermYears 0) {
monthlyRepayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// If interest rate is 0, payment is just principal divided by number of payments
monthlyRepayment = loanAmount / numberOfPayments;
}
// Format the result to two decimal places
var formattedRepayment = monthlyRepayment.toFixed(2);
currencyElement.textContent = "$" + formattedRepayment;
currencyElement.style.fontSize = "36px";
currencyElement.style.color = "#28a745"; // Success green
}