Purchasing a home is likely the largest financial commitment you will make in your lifetime. Understanding how your mortgage payments are calculated is crucial for long-term financial planning. A mortgage is not just the sticker price of the house divided by the number of months; it involves complex amortization schedules, interest compounding, and additional costs like property taxes and insurance.
This Mortgage Payment Calculator breaks down the principal and interest components to give you a clear picture of your monthly obligations. By adjusting the Home Price, Down Payment, and Interest Rate, you can see exactly how small changes affect your monthly budget.
How the Formula Works
The core of a fixed-rate mortgage calculation uses the following amortization formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M = Total monthly payment
P = Principal loan amount (Home Price minus Down Payment)
i = Monthly interest rate (Annual rate divided by 12)
n = Total number of months (Loan term in years multiplied by 12)
While the math can be intimidating, our tool handles these calculations instantly. It allows you to simulate scenarios such as "What if I put down an extra $10,000?" or "How much will a 0.5% rate increase cost me over 30 years?"
The Impact of Interest Rates and Loan Terms
Your interest rate significantly impacts the total cost of your home. On a $300,000 loan, a difference of just 1% in the interest rate can equate to tens of thousands of dollars in extra interest payments over a 30-year term. Similarly, opting for a 15-year term instead of a 30-year term will increase your monthly payment but drastically reduce the total interest paid, allowing you to build equity faster.
Additional Costs: Property Taxes
Many homebuyers forget to factor in property taxes and homeowners insurance, which are often bundled into the monthly mortgage payment via an escrow account. This calculator includes a field for Yearly Property Tax to provide a more realistic estimate of what will actually leave your bank account every month. Remember, these taxes can fluctuate annually based on local government assessments.
function calculateMortgage() {
// Get input values using exact IDs
var homePriceInput = document.getElementById("homePrice");
var downPaymentInput = document.getElementById("downPayment");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var propertyTaxInput = document.getElementById("propertyTax");
var resultDiv = document.getElementById("mortgageResult");
// Parse values
var price = parseFloat(homePriceInput.value);
var down = parseFloat(downPaymentInput.value);
var rate = parseFloat(interestRateInput.value);
var years = parseFloat(loanTermInput.value);
var taxYearly = parseFloat(propertyTaxInput.value);
// Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(years)) {
resultDiv.style.display = "block";
resultDiv.innerHTML = "Please enter valid numbers for all required fields.";
return;
}
// Logic
var principal = price – down;
if (principal <= 0) {
resultDiv.style.display = "block";
resultDiv.innerHTML = "Down payment cannot be greater than or equal to the home price.";
return;
}
var monthlyInterest = (rate / 100) / 12;
var totalPayments = years * 12;
var monthlyPayment = 0;
// Handle 0% interest edge case
if (rate === 0) {
monthlyPayment = principal / totalPayments;
} else {
// Standard Amortization Formula
var x = Math.pow(1 + monthlyInterest, totalPayments);
monthlyPayment = (principal * x * monthlyInterest) / (x – 1);
}
// Tax Calculation
var monthlyTax = 0;
if (!isNaN(taxYearly)) {
monthlyTax = taxYearly / 12;
}
var totalMonthly = monthlyPayment + monthlyTax;
var totalCost = (monthlyPayment * totalPayments) + down;
var totalInterest = (monthlyPayment * totalPayments) – principal;
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// Display Results
resultDiv.style.display = "block";
resultDiv.innerHTML =
'
Principal & Interest:' + formatter.format(monthlyPayment) + '