*Taxes and insurance are not included in this estimate.
Understanding Your Mortgage Calculation
Calculating your monthly mortgage payment is a critical step in the home buying process. This specific calculator allows you to estimate your monthly financial obligation based on the purchase price of your home, your down payment, the loan term, and the current interest rate.
How the Formula Works
The calculation uses the standard amortization formula to determine the fixed monthly payment required to pay off your loan principal and interest over the specified term. The core components are:
Principal (P): This is the loan amount, calculated as the Home Price minus your Down Payment.
Interest Rate (r): The annual interest rate is divided by 12 to get the monthly rate.
Number of Payments (n): The loan term in years multiplied by 12 months.
Why Your Interest Rate Matters
Even a small difference in the interest rate can significantly impact your monthly payment and the total interest paid over the life of the loan. For example, on a $300,000 loan, a 1% difference in rate can change your monthly payment by hundreds of dollars and your total interest cost by tens of thousands.
Loan Term Considerations
Choosing between a 15-year and a 30-year mortgage involves a trade-off. A 30-year term offers lower monthly payments, making the home more affordable month-to-month, but results in higher total interest costs. Conversely, a 15-year term has higher monthly payments but allows you to build equity faster and save significantly on interest.
Next Steps
Use the results from this calculator to determine your budget. Remember to account for property taxes, homeowners insurance, and private mortgage insurance (PMI) if your down payment is less than 20%, as these will add to your actual monthly housing expense.
function calculateMortgage() {
// Get input values using standard var
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('interestRate').value);
// Validate inputs
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(loanTermYears) || isNaN(annualInterestRate)) {
alert("Please enter valid numbers for all fields.");
return;
}
if (downPayment >= homePrice) {
alert("Down payment cannot be equal to or greater than the home price.");
return;
}
// Calculate Principal
var principal = homePrice – downPayment;
// Calculate Monthly Interest Rate
var monthlyInterestRate = (annualInterestRate / 100) / 12;
// Calculate Total Number of Payments
var numberOfPayments = loanTermYears * 12;
// Calculate Monthly Payment using formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyPayment = 0;
if (annualInterestRate === 0) {
monthlyPayment = principal / numberOfPayments;
} else {
var mathPower = Math.pow(1 + monthlyInterestRate, numberOfPayments);
monthlyPayment = principal * ((monthlyInterestRate * mathPower) / (mathPower – 1));
}
// Calculate Totals
var totalPaymentAmount = monthlyPayment * numberOfPayments;
var totalInterest = totalPaymentAmount – principal;
// Display Results
document.getElementById('monthlyPaymentDisplay').innerText = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalInterestDisplay').innerText = "$" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalCostDisplay').innerText = "$" + totalPaymentAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show result div
document.getElementById('mcResult').style.display = "block";
}