A 10-year mortgage is a type of home loan with a repayment period of 10 years (120 months). While less common than 15-year or 30-year mortgages, a 10-year term can be attractive for borrowers who want to pay off their home quickly, save significantly on total interest paid, and build equity faster. However, this accelerated repayment schedule typically results in higher monthly payments compared to longer-term loans.
How the 10-Year Mortgage Payment is Calculated
The monthly payment for a mortgage is calculated using an amortization formula. For a 10-year mortgage, this formula determines the fixed payment amount you'll make each month for 120 months. The formula takes into account:
Principal Loan Amount (P): The total amount borrowed.
Annual Interest Rate (r): The yearly interest rate on the loan.
Loan Term (n): The total number of payments. For a 10-year mortgage, this is 10 years * 12 months/year = 120 months.
The formula for the monthly payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment
P = The principal loan amount
i = Your *monthly* interest rate (annual rate divided by 12)
n = The total number of payments over the loan's lifetime (120 for a 10-year mortgage)
To use this calculator, simply input the total amount you wish to borrow (Loan Amount), and the Annual Interest Rate you are offered. The calculator will then apply the formula to provide your estimated monthly principal and interest payment for a 10-year term.
Benefits of a 10-Year Mortgage:
Faster Equity Building: You own your home outright much sooner.
Significant Interest Savings: You'll pay considerably less interest over the life of the loan compared to longer terms.
Financial Freedom: Being mortgage-free sooner can provide greater financial flexibility.
Considerations for a 10-Year Mortgage:
Higher Monthly Payments: The shorter term means each payment needs to cover more principal and interest, leading to larger required payments.
Affordability: Ensure the higher monthly payment fits comfortably within your budget.
Alternative Options: If the monthly payments are too high, consider a longer loan term (like 15 or 30 years) and making extra principal payments when possible.
This calculator provides an estimate for the principal and interest portion of your mortgage payment. It does not include property taxes, homeowners insurance, or potential private mortgage insurance (PMI), which are often escrowed and added to your total monthly housing expense.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var resultDiv = document.getElementById("result");
if (isNaN(loanAmount) || loanAmount <= 0) {
resultDiv.innerHTML = "Please enter a valid Loan Amount.";
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
resultDiv.innerHTML = "Please enter a valid Annual Interest Rate.";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = 120; // 10 years * 12 months
var monthlyPayment;
if (monthlyInterestRate === 0) {
monthlyPayment = loanAmount / numberOfPayments;
} else {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
resultDiv.innerHTML = "Calculation error. Please check your inputs.";
} else {
resultDiv.innerHTML = "$" + monthlyPayment.toFixed(2);
}
}