Understanding Your Mortgage Payment
A mortgage payment calculator helps you estimate your monthly principal and interest payments for a home loan. Understanding these components is crucial when budgeting for homeownership. The primary factors influencing your monthly mortgage payment are:
- Loan Amount (Principal): This is the total amount of money you borrow from the lender to purchase your home. A larger loan amount will naturally result in higher monthly payments.
- Annual Interest Rate: This is the percentage charged by the lender for borrowing the money. A higher interest rate means you pay more in interest over the life of the loan, leading to higher monthly payments. Interest rates can be fixed (staying the same for the life of the loan) or adjustable (changing periodically based on market conditions).
- Loan Term: This is the duration over which you agree to repay the loan. Common loan terms are 15, 20, or 30 years. A shorter loan term will result in higher monthly payments but you'll pay less interest overall. Conversely, a longer loan term will have lower monthly payments but you'll pay more interest over time.
The standard formula used to calculate the monthly mortgage payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
- P = Principal loan amount
- i = Monthly interest rate (Annual interest rate divided by 12)
- n = Total number of payments (Loan term in years multiplied by 12)
This calculator provides an estimate of your principal and interest payment. It does not include other costs that are typically part of your total monthly housing expense, such as property taxes, homeowner's insurance, or private mortgage insurance (PMI), often referred to as PITI (Principal, Interest, Taxes, and Insurance).
function calculateMortgage() {
var principal = parseFloat(document.getElementById("principal").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
if (isNaN(principal) || isNaN(annualInterestRate) || isNaN(loanTerm) || principal <= 0 || annualInterestRate < 0 || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
resultDiv.innerHTML = "Calculation resulted in an invalid number. Please check your inputs.";
return;
}
resultDiv.innerHTML =
"
Estimated Monthly Payment (Principal & Interest):
" +
"
$" + monthlyPayment.toFixed(2) + "";
}
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