.calculator-container {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
background-color: #f9f9f9;
}
.calculator-container h2 {
text-align: center;
margin-bottom: 20px;
color: #333;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(2, 1fr);
gap: 15px;
margin-bottom: 20px;
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 5px;
font-weight: bold;
color: #555;
}
.input-group input {
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 16px;
}
button {
display: block;
width: 100%;
padding: 12px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease;
}
button:hover {
background-color: #0056b3;
}
#result {
margin-top: 20px;
padding: 15px;
border: 1px dashed #007bff;
border-radius: 4px;
background-color: #e7f3ff;
text-align: center;
font-size: 18px;
font-weight: bold;
color: #0056b3;
}
function calculateAffordability() {
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.textContent = "Please enter valid numbers for all fields.";
return;
}
if (annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTerm <= 0) {
resultDiv.textContent = "Please enter positive values for income, interest rate, and loan term, and non-negative for debt and down payment.";
return;
}
// Lenders often use a Debt-to-Income (DTI) ratio. A common guideline is that total housing expenses (PITI)
// should not exceed 28% of gross monthly income, and total debt (including housing) should not exceed 36% of gross monthly income.
// We will calculate based on these common guidelines.
var grossMonthlyIncome = annualIncome / 12;
// Maximum allowable monthly housing payment (Principal, Interest, Taxes, Insurance – PITI)
var maxHousingPayment = grossMonthlyIncome * 0.28;
// Maximum allowable total monthly debt payments
var maxTotalDebtPayment = grossMonthlyIncome * 0.36;
// The maximum mortgage principal and interest (P&I) payment we can afford
var maxMortgagePayment = maxTotalDebtPayment – monthlyDebt;
if (maxMortgagePayment 0 && numberOfPayments > 0) {
var factor = Math.pow(1 + monthlyInterestRate, numberOfPayments);
maxLoanAmount = maxMortgagePayment * (factor – 1) / (monthlyInterestRate * factor);
} else if (monthlyInterestRate === 0 && numberOfPayments > 0) { // Handle 0% interest rate edge case
maxLoanAmount = maxMortgagePayment * numberOfPayments;
}
// The maximum affordable home price is the max loan amount plus the down payment
var maxAffordablePrice = maxLoanAmount + downPayment;
// For a more realistic affordability estimate, we also consider the max housing payment directly.
// We'll present both figures, as the 28% rule is for housing PITI and the 36% rule is for total debt.
// The lower of the two implied home prices is often a more conservative estimate.
// Let's estimate property taxes and insurance to factor into PITI for the 28% rule.
// This is a rough estimation, actual taxes and insurance vary greatly.
// Assuming taxes at 1.2% of home value annually and insurance at 0.3% of home value annually.
var estimatedAnnualTaxesAndInsurance = maxHousingPayment * 0.15; // Placeholder, ideally this would be dynamic or more complex.
// This is a VERY rough estimate for demonstration.
var estimatedMonthlyTaxesAndInsurance = estimatedAnnualTaxesAndInsurance / 12;
var maxMonthlyPAndI = maxHousingPayment – estimatedMonthlyTaxesAndInsurance;
var maxLoanAmountBasedOnHousingRatio = 0;
if (maxMonthlyPAndI > 0 && monthlyInterestRate > 0 && numberOfPayments > 0) {
var factorHousing = Math.pow(1 + monthlyInterestRate, numberOfPayments);
maxLoanAmountBasedOnHousingRatio = maxMonthlyPAndI * (factorHousing – 1) / (monthlyInterestRate * factorHousing);
} else if (maxMonthlyPAndI > 0 && monthlyInterestRate === 0 && numberOfPayments > 0) {
maxLoanAmountBasedOnHousingRatio = maxMonthlyPAndI * numberOfPayments;
}
var maxAffordablePriceBasedOnHousingRatio = maxLoanAmountBasedOnHousingRatio + downPayment;
// The final affordable price is the *lower* of the two calculations to be more conservative.
var finalMaxAffordablePrice = Math.min(maxAffordablePrice, maxAffordablePriceBasedOnHousingRatio);
// Ensure we don't show a negative or unrealistic price
if (finalMaxAffordablePrice < downPayment) {
finalMaxAffordablePrice = downPayment; // Can't afford more than the down payment if calculations yield less.
}
resultDiv.innerHTML = "Estimated Maximum Affordable Home Price: $" + finalMaxAffordablePrice.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + "" +
"(Based on common lender guidelines of DTI ratios.)";
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the home-buying process. It's not just about what you *want* to spend, but what lenders are likely to approve and what fits comfortably within your budget. This calculator provides an estimate based on common lending criteria, helping you set realistic expectations.
Key Factors Influencing Affordability:
Annual Household Income: This is the primary driver. Lenders look at your consistent income to assess your ability to repay a loan. Higher income generally means higher borrowing capacity.
Existing Monthly Debt Payments: This includes car loans, student loans, credit card minimum payments, and any other recurring debts. Lenders use these to calculate your Debt-to-Income (DTI) ratio.
Down Payment: A larger down payment reduces the loan amount needed, which can lower your monthly payments and potentially allow you to qualify for a larger loan overall. It also reduces the lender's risk.
Interest Rate: Even small changes in interest rates can significantly impact your monthly payment and the total interest paid over the life of the loan. Higher rates mean higher payments for the same loan amount.
Loan Term: Mortgages are typically offered in terms of 15 or 30 years. A shorter term means higher monthly payments but less interest paid overall. A longer term results in lower monthly payments but more interest paid.
How the Calculator Works (Common Lender Guidelines):
Lenders typically assess affordability using Debt-to-Income (DTI) ratios. Two common benchmarks are:
Front-End Ratio (Housing Ratio): Your total housing expenses (Principal, Interest, Taxes, and Insurance – PITI) should ideally not exceed 28% of your gross monthly income.
Back-End Ratio (Total Debt Ratio): Your total monthly debt payments (including PITI) should not exceed 36% of your gross monthly income.
This calculator estimates the maximum loan amount you might qualify for by considering these DTI ratios. It calculates the maximum allowable monthly housing payment and subtracts your existing monthly debts to determine the maximum mortgage payment you can afford. It then uses a standard mortgage formula to work backward and find the principal loan amount. Finally, it adds your down payment to estimate the maximum home price you could potentially afford.
Important Note: This calculator provides an estimate. Actual loan approval amounts can vary based on the lender's specific policies, your credit score, employment history, and other factors. It's always recommended to speak with a mortgage professional for a personalized assessment.