.calculator-container {
font-family: sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 500px;
margin: 20px auto;
box-shadow: 0 2px 5px rgba(0,0,0,0.1);
}
.calculator-container h2 {
text-align: center;
margin-bottom: 20px;
color: #333;
}
.calculator-inputs {
margin-bottom: 20px;
}
.input-group {
margin-bottom: 15px;
display: flex;
align-items: center;
justify-content: space-between;
}
.input-group label {
margin-right: 10px;
flex-basis: 60%;
font-weight: bold;
color: #555;
}
.input-group input {
padding: 8px;
border: 1px solid #ccc;
border-radius: 4px;
width: 40%;
box-sizing: border-box;
}
.calculator-container button {
display: block;
width: 100%;
padding: 10px 15px;
background-color: #007bff;
color: white;
border: none;
border-radius: 5px;
font-size: 16px;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 25px;
padding: 15px;
background-color: #e9ecef;
border: 1px solid #ced4da;
border-radius: 5px;
text-align: center;
font-size: 1.1em;
color: #495057;
}
.calculator-result span {
font-weight: bold;
color: #28a745;
}
var calculateMortgageAffordability = function() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter positive values for income, interest rate, and loan term, and non-negative values for debt and down payment.";
return;
}
// General guideline: PITI (Principal, Interest, Taxes, Insurance) should not exceed 28% of gross monthly income.
// Debt-to-income ratio (including PITI) should not exceed 36%.
var grossMonthlyIncome = annualIncome / 12;
var maxPITI = grossMonthlyIncome * 0.28;
var maxTotalDebtRatio = grossMonthlyIncome * 0.36;
var maxMonthlyMortgagePayment = maxTotalDebtRatio – monthlyDebt;
var affordableMonthlyPayment = Math.min(maxPITI, maxMonthlyMortgagePayment);
if (affordableMonthlyPayment <= 0) {
resultDiv.innerHTML = "Based on your inputs, you may not qualify for a mortgage at this time. Maximum Estimated Mortgage Amount: $0";
return;
}
// Mortgage affordability calculation using the loan payment formula:
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where:
// M = Monthly Payment
// P = Principal Loan Amount
// i = Monthly interest rate (annual rate / 12)
// n = Total number of payments (loan term in years * 12)
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var principalLoanAmount = 0;
if (monthlyInterestRate > 0 && numberOfPayments > 0) {
principalLoanAmount = affordableMonthlyPayment * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else if (affordableMonthlyPayment > 0 && monthlyInterestRate === 0) {
principalLoanAmount = affordableMonthlyPayment * numberOfPayments;
}
var maxHomePrice = principalLoanAmount + downPayment;
resultDiv.innerHTML = "Maximum Estimated Monthly Mortgage Payment (P&I): $" + affordableMonthlyPayment.toFixed(2) + "" +
"Maximum Estimated Loan Amount: $" + principalLoanAmount.toFixed(2) + "" +
"Estimated Maximum Home Price (including down payment): $" + maxHomePrice.toFixed(2) + "";
};
Understanding Mortgage Affordability
Determining how much home you can afford is a crucial step in the home-buying process. A mortgage affordability calculator helps estimate the maximum loan amount and, consequently, the maximum home price you can realistically handle based on your financial situation. Lenders use various metrics to assess your borrowing capacity, and this calculator simulates some of those key considerations.
Key Factors Explained:
Annual Income: This is your gross annual income before taxes. Lenders will look at your consistent income to ensure you can make payments.
Total Monthly Debt Payments: This includes recurring monthly obligations such as car loans, student loans, credit card minimum payments, and personal loans. These are debts you need to service regardless of your housing costs.
Down Payment: The upfront cash you contribute towards the purchase price of the home. A larger down payment reduces the loan amount needed, making the mortgage more affordable and potentially securing better loan terms.
Estimated Annual Interest Rate: This is the yearly interest rate you anticipate for your mortgage. Mortgage rates fluctuate, so using a realistic estimate is important. Higher rates mean higher monthly payments for the same loan amount.
Loan Term (Years): The duration over which you will repay the mortgage. Common terms are 15, 20, or 30 years. Longer terms result in lower monthly payments but more interest paid over the life of the loan.
How the Calculator Works:
This calculator uses common lending guidelines to estimate your affordability. A widely used rule of thumb is the 28/36 rule:
Front-end Ratio (28% Rule): Your total housing costs (including Principal, Interest, Property Taxes, and Homeowner's Insurance – often called PITI) should not exceed 28% of your gross monthly income.
Back-end Ratio (36% Rule): Your total debt obligations (including your potential mortgage payment plus all other monthly debts) should not exceed 36% of your gross monthly income.
The calculator first determines the maximum monthly mortgage payment you can afford based on the 36% debt-to-income ratio, subtracting your existing monthly debt payments. It then compares this to the 28% of your gross monthly income limit for housing costs. The more conservative of the two limits is used as your affordable monthly mortgage payment. Using the loan term and interest rate, it then calculates the maximum loan principal you could support with that monthly payment and adds your down payment to estimate the maximum home price you can afford.
Disclaimer: This calculator provides an estimate for informational purposes only. It does not constitute financial advice, nor is it a guarantee of loan approval. Actual loan approval and terms depend on a lender's specific underwriting criteria, your credit score, property appraisal, and other factors. It's always recommended to consult with a mortgage professional for personalized advice.