Monthly
Bi-Weekly (Every two weeks)
Bi-Weekly (Accelerated)
Weekly
Estimated Monthly Mortgage Payment
$0.00
Understanding Your Mortgage Affordability
A mortgage is a significant financial commitment, and understanding how to calculate your potential monthly payments is crucial for informed decision-making. This Ratehub-style Mortgage Affordability Calculator helps you estimate your regular mortgage payment based on key financial inputs.
How the Calculation Works
The calculator uses a standard mortgage payment formula to determine your estimated monthly payment. The core formula is based on the present value of an annuity, considering the loan principal, interest rate, and loan term.
Here's a breakdown of the inputs and the underlying principles:
Property Price: The total cost of the home you intend to purchase.
Down Payment: The upfront amount you pay towards the property. This reduces the principal amount you need to borrow.
Loan Principal: Calculated as Property Price - Down Payment. This is the actual amount you'll be financing.
Annual Interest Rate: The yearly interest rate charged by the lender. This is converted to a periodic rate for calculation.
Amortization Period: The total length of time over which the mortgage will be repaid, typically in years (e.g., 25 years).
Payment Frequency: How often you make mortgage payments (e.g., monthly, bi-weekly, weekly). This affects the number of payments per year and the amount of each payment. Accelerated bi-weekly payments, for example, result in one extra monthly payment per year, helping you pay down the principal faster.
The Mortgage Payment Formula (Simplified)
The most common formula for calculating a fixed-rate mortgage payment is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment
P = The principal loan amount (Property Price – Down Payment)
i = The periodic interest rate (Annual Interest Rate / Number of payments per year)
n = The total number of payments over the loan's lifetime (Amortization Period in Years * Number of payments per year)
Note: The calculator adjusts the interest rate and number of payments based on the selected payment frequency to ensure accuracy.
Why Use a Mortgage Calculator?
Budgeting: Helps you understand how much you can afford to spend on a home.
Comparison: Allows you to compare different mortgage scenarios (e.g., varying down payments, interest rates).
Financial Planning: Essential for estimating your long-term financial obligations.
Pre-Approval Preparation: Gives you a realistic idea of potential monthly costs before speaking with lenders.
This calculator provides an estimate for the principal and interest portion of your mortgage payment. It does not include other costs such as property taxes, homeowner's insurance, or potential mortgage default insurance (like CMHC premiums), which will also contribute to your total housing costs.
function calculateMortgage() {
var propertyPrice = parseFloat(document.getElementById("propertyPrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var amortizationPeriod = parseInt(document.getElementById("amortizationPeriod").value);
var paymentFrequency = parseInt(document.getElementById("paymentFrequency").value);
// Input validation
if (isNaN(propertyPrice) || propertyPrice <= 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(amortizationPeriod) || amortizationPeriod <= 0 ||
isNaN(paymentFrequency) || paymentFrequency = propertyPrice) {
document.getElementById("mortgageResult").innerText = "Down payment cannot exceed property price.";
return;
}
var loanPrincipal = propertyPrice – downPayment;
var monthlyInterestRate = (annualInterestRate / 100) / paymentFrequency;
var numberOfPayments = amortizationPeriod * paymentFrequency;
var monthlyPayment = 0;
if (monthlyInterestRate === 0) {
// Handle 0% interest rate scenario
monthlyPayment = loanPrincipal / numberOfPayments;
} else {
// Standard mortgage payment formula
monthlyPayment = loanPrincipal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
// Format the result to two decimal places and add currency symbol
var formattedMonthlyPayment = "$" + monthlyPayment.toFixed(2);
document.getElementById("mortgageResult").innerText = formattedMonthlyPayment;
}