.calculator-container {
font-family: sans-serif;
border: 1px solid #ddd;
padding: 20px;
border-radius: 8px;
max-width: 600px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(auto-fit, minmax(250px, 1fr));
gap: 15px;
margin-bottom: 20px;
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 5px;
font-weight: bold;
color: #333;
}
.input-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1rem;
}
.calculator-container button {
background-color: #007bff;
color: white;
padding: 12px 20px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 1rem;
transition: background-color 0.3s ease;
width: 100%;
margin-bottom: 20px;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calculator-result {
background-color: #e9ecef;
padding: 15px;
border-radius: 4px;
text-align: center;
font-size: 1.1rem;
color: #444;
min-height: 50px; /* Ensures the div is visible even with no initial content */
}
.calculator-result strong {
color: #0056b3;
}
function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var debtToIncomeRatio = parseFloat(document.getElementById("debtToIncomeRatio").value) / 100;
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value) / 100;
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Validate inputs
if (isNaN(annualIncome) || isNaN(debtToIncomeRatio) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) ||
annualIncome <= 0 || debtToIncomeRatio <= 0 || interestRate < 0 || loanTerm <= 0) {
resultDiv.innerHTML = "Error: Please enter valid positive numbers for all fields.";
return;
}
// Calculate maximum monthly housing payment based on DTI
var maxMonthlyPayment = annualIncome / 12 * debtToIncomeRatio;
// We need to estimate the loan amount that would result in this monthly payment.
// The formula for monthly mortgage payment (M) is:
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where:
// P = Principal loan amount
// i = Monthly interest rate (annual rate / 12)
// n = Total number of payments (loan term in years * 12)
// Rearranging to solve for P (Principal Loan Amount):
// P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ]
var monthlyInterestRate = interestRate / 12;
var numberOfPayments = loanTerm * 12;
var principalLoanAmount = 0;
if (monthlyInterestRate > 0 && numberOfPayments > 0) {
principalLoanAmount = maxMonthlyPayment * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else if (monthlyInterestRate === 0 && numberOfPayments > 0) {
principalLoanAmount = maxMonthlyPayment * numberOfPayments;
}
// Calculate estimated maximum home price
var maxHomePrice = principalLoanAmount + downPayment;
// Format numbers for display
var formattedMaxMonthlyPayment = maxMonthlyPayment.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedPrincipalLoanAmount = principalLoanAmount.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxHomePrice = maxHomePrice.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = "Based on your inputs:Estimated Maximum Monthly Housing Payment (Principal, Interest, Taxes, Insurance): " + formattedMaxMonthlyPayment + "" +
"Estimated Maximum Loan Amount: " + formattedPrincipalLoanAmount + "" +
"Estimated Maximum Home Price (including down payment): " + formattedMaxHomePrice;
}
Understanding Mortgage Affordability
Determining how much house you can afford is a critical step in the home-buying process. Lenders use various factors to assess your ability to repay a mortgage, and understanding these metrics can help you set realistic expectations and budget effectively. The Mortgage Affordability Calculator provides an estimate based on key financial inputs.
Key Factors in Mortgage Affordability:
Annual Gross Income: This is the total income you earn before taxes and other deductions. Lenders look at your consistent income to gauge your ability to handle monthly payments.
Debt-to-Income Ratio (DTI): This is a crucial metric that compares your total monthly debt payments (including the potential mortgage payment, car loans, student loans, credit card minimums, etc.) to your gross monthly income. A lower DTI generally indicates a lower risk for lenders. Common targets for lenders are often below 36% for front-end DTI (housing costs only) and below 43% for back-end DTI (all debts). This calculator uses a target DTI to estimate your maximum affordable housing payment.
Down Payment: The amount of cash you put towards the purchase price of the home. A larger down payment reduces the loan amount needed, potentially lowering your monthly payments and the overall interest paid. It can also help you avoid Private Mortgage Insurance (PMI) if it exceeds 20% of the home's value.
Interest Rate: The annual interest rate charged on the mortgage loan. Even small variations in interest rates can significantly impact your monthly payment and the total cost of the loan over its lifetime. This calculator uses an estimated interest rate for a conventional loan.
Loan Term: The duration over which the mortgage loan will be repaid. Common terms are 15, 20, or 30 years. Shorter terms typically have higher monthly payments but result in less interest paid overall. Longer terms have lower monthly payments but you'll pay more interest over time.
How the Calculator Works:
The Mortgage Affordability Calculator takes your annual income and target Debt-to-Income (DTI) ratio to determine the maximum monthly payment you can reasonably afford for housing. This 'maximum monthly housing payment' typically includes not only the principal and interest (P&I) on your mortgage but also estimated costs for property taxes, homeowner's insurance, and potentially HOA fees (often referred to as PITI).
It then uses the provided interest rate and loan term to calculate the maximum loan amount that would correspond to that affordable monthly payment. Finally, by adding your specified down payment to this maximum loan amount, the calculator estimates the maximum purchase price of a home you might be able to afford.
Example Calculation:
Let's say you have an Annual Gross Income of $90,000. You aim for a Target Debt-to-Income Ratio (DTI) of 35%. You plan to make a Down Payment of $40,000. You estimate the Interest Rate will be 6.5%, and you're considering a Loan Term of 30 years.
Your gross monthly income is $90,000 / 12 = $7,500.
Your maximum total monthly housing payment (based on 35% DTI) would be $7,500 * 0.35 = $2,625.
With a 6.5% interest rate over 30 years, a monthly payment of $2,625 would support a loan amount of approximately $415,000.
Adding your $40,000 down payment, the estimated maximum home price you could afford is $415,000 + $40,000 = $455,000.
Disclaimer: This calculator provides an estimate for informational purposes only and does not constitute financial advice. Actual loan approval and affordability depend on a lender's specific underwriting criteria, your credit score, employment history, existing debts, and other factors. It's highly recommended to speak with a mortgage lender for a pre-approval.