The Mortgage Calculator Company

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Mortgage Payment Calculator

Your Estimated Monthly Payment

$0.00

Understanding Your Mortgage Payment

A mortgage is a significant financial commitment, and understanding how your monthly payment is calculated is crucial. This calculator helps you estimate your principal and interest payment based on three key factors: the loan amount, the annual interest rate, and the loan term.

The Formula Explained

The standard formula for calculating a fixed-rate mortgage payment (M) is:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Where:

  • P = Principal loan amount (the amount you borrow).
  • i = Monthly interest rate. This is calculated by dividing the annual interest rate by 12. For example, a 5% annual rate becomes 0.05 / 12 = 0.00416667.
  • n = Total number of payments over the loan's lifetime. This is calculated by multiplying the loan term in years by 12. For a 30-year mortgage, n = 30 * 12 = 360.

How to Use the Calculator

1. Loan Amount: Enter the total amount of money you need to borrow for your property. 2. Annual Interest Rate: Input the interest rate offered by your lender as a percentage (e.g., enter '5' for 5%). 3. Loan Term (Years): Specify the duration of your mortgage in years (e.g., 15 or 30 years).

Clicking "Calculate Monthly Payment" will apply the formula to provide an estimate of your principal and interest payment.

What's Included (and Not Included)

This calculator provides an estimate for the principal and interest (P&I) portion of your mortgage payment. It does not include:

  • Property Taxes: Funds collected by your lender to pay your local property taxes.
  • Homeowner's Insurance: Premiums for your homeowner's insurance policy.
  • Private Mortgage Insurance (PMI): If your down payment is less than 20%, you may need to pay PMI.
  • Homeowner Association (HOA) Fees: If applicable to your property.

Your actual total monthly housing expense will be higher than the amount calculated here. Lenders often collect funds for taxes and insurance in an escrow account and include them in your total monthly payment (often referred to as PITI: Principal, Interest, Taxes, and Insurance).

Example Calculation

Let's say you want to buy a home and need a mortgage with the following details:

  • Loan Amount (P): $300,000
  • Annual Interest Rate: 6.5%
  • Loan Term: 30 years

First, we calculate the monthly interest rate (i) and the total number of payments (n):

  • i = 6.5% / 12 = 0.065 / 12 ≈ 0.00541667
  • n = 30 years * 12 months/year = 360

Plugging these values into the formula:

M = 300000 [ 0.00541667(1 + 0.00541667)^360 ] / [ (1 + 0.00541667)^360 – 1]

M ≈ $1,896.19

So, the estimated monthly principal and interest payment for this mortgage would be approximately $1,896.19.

function calculateMortgage() { var loanAmount = parseFloat(document.getElementById("loanAmount").value); var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value); var loanTermYears = parseFloat(document.getElementById("loanTermYears").value); var monthlyPaymentElement = document.getElementById("monthlyPayment"); var paymentDetailsElement = document.getElementById("paymentDetails"); if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || loanAmount <= 0 || annualInterestRate < 0 || loanTermYears <= 0) { monthlyPaymentElement.textContent = "Invalid input"; paymentDetailsElement.textContent = "Please enter valid positive numbers for all fields."; return; } var monthlyInterestRate = annualInterestRate / 100 / 12; var numberOfPayments = loanTermYears * 12; var monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1); if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) { monthlyPaymentElement.textContent = "Error"; paymentDetailsElement.textContent = "Calculation error. Please check your inputs."; return; } monthlyPaymentElement.textContent = "$" + monthlyPayment.toFixed(2); paymentDetailsElement.textContent = `Based on a ${loanTermYears}-year term with a ${annualInterestRate}% annual interest rate.`; }

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