.calculator-container {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
box-shadow: 0 2px 4px rgba(0,0,0,0.1);
}
.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;
font-size: 0.9em;
}
.input-group input {
padding: 8px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1em;
}
button {
padding: 10px 15px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 1em;
margin-top: 10px;
}
button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
background-color: #e9ecef;
border-radius: 4px;
font-size: 1.1em;
text-align: center;
min-height: 50px; /* To prevent layout shift */
}
function calculateMortgageAffordability() {
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");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(annualIncome) || annualIncome <= 0 ||
isNaN(monthlyDebt) || monthlyDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTerm) || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Lender Affordability Guidelines (common benchmarks)
// Front-end ratio (housing expenses including PITI) typically < 28% of gross monthly income
// Back-end ratio (total debt including PITI) typically < 36% of gross monthly income
var maxHousingRatio = 0.28;
var maxTotalDebtRatio = 0.36;
var grossMonthlyIncome = annualIncome / 12;
var maxAllowableMonthlyDebt = grossMonthlyIncome * maxTotalDebtRatio;
var maxHousingPayment = grossMonthlyIncome * maxHousingRatio;
// Calculate the maximum allowed PITI (Principal, Interest, Taxes, Insurance)
// Lenders often use the back-end ratio to determine the *maximum total debt*,
// so we need to subtract existing debts to find the maximum PITI.
var maxPitiFromBackEnd = maxAllowableMonthlyDebt – monthlyDebt;
// The actual affordable PITI is the *lesser* of the two ratios' maximums
var affordablePiti = Math.min(maxHousingPayment, maxPitiFromBackEnd);
if (affordablePiti 0 && numberOfPayments > 0) {
var factor = Math.pow(1 + monthlyInterestRate, numberOfPayments);
var monthlyPaymentFactor = (monthlyInterestRate * factor) / (factor – 1);
if (monthlyPaymentFactor > 0) {
maxLoanAmount = affordablePiti / monthlyPaymentFactor;
}
}
// We can't directly calculate Taxes and Insurance (TI) from PITI without assumptions.
// A common approach is to estimate TI as a percentage of the home value, or a fixed amount.
// For simplicity in this calculator, we'll focus on the principal and interest (PI) part
// that the loan amount calculation supports, and acknowledge that TI will reduce the
// *actual* amount you can borrow for PI.
// Let's make a simplified assumption that PITI includes estimated taxes and insurance.
// To estimate the maximum *home price* you can afford, we add the down payment.
var maxHomePriceAffordable = maxLoanAmount + downPayment;
// Format results
var formattedMaxLoan = maxLoanAmount.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxHomePrice = maxHomePriceAffordable.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMonthlyPiti = affordablePiti.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedGrossMonthly = grossMonthlyIncome.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
resultDiv.innerHTML =
"Estimated Maximum Affordable Monthly PITI: " + formattedMonthlyPiti + "" +
"(This includes Principal, Interest, Property Taxes, and Homeowner's Insurance)" +
"Estimated Maximum Loan Amount: " + formattedMaxLoan + "" +
"Estimated Maximum Home Price (with down payment): " + formattedMaxHomePrice + "" +
"Based on a maximum housing expense ratio of 28% of your gross monthly income ($" + formattedGrossMonthly + "/month) and a total debt ratio of 36%. This is an estimate; actual lender qualification will vary.";
}
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 will realistically allow you to borrow based on your financial situation. This mortgage affordability calculator helps estimate your borrowing power by considering key financial factors.
Key Factors in Mortgage Affordability:
Annual Gross Income: This is your total income before taxes and other deductions. Lenders use this as the primary indicator of your ability to repay a loan.
Total Monthly Debt Payments: This includes payments for credit cards, auto loans, student loans, personal loans, and any other recurring debts excluding your potential mortgage payment. Lenders look at your total debt obligations to ensure you aren't overextended.
Down Payment: The amount of money you pay upfront towards the purchase price of the home. A larger down payment reduces the loan amount needed and can improve your borrowing terms.
Estimated Annual Interest Rate: The percentage charged by the lender on the loan amount. This significantly impacts your monthly payment and the total interest paid over the life of the loan.
Loan Term (Years): The length of time you have to repay the mortgage, typically 15 or 30 years. Shorter terms mean higher monthly payments but less interest paid overall.
How the Calculator Works:
Lenders typically use debt-to-income (DTI) ratios to assess affordability:
Front-End Ratio (Housing Ratio): This ratio compares your potential total monthly housing payment (Principal, Interest, Taxes, and Insurance – PITI) to your gross monthly income. A common benchmark is that your PITI should not exceed 28% of your gross monthly income.
Back-End Ratio (Total Debt Ratio): This ratio compares your total monthly debt obligations (including the estimated PITI) to your gross monthly income. A common benchmark is that your total debt should not exceed 36% of your gross monthly income.
Our calculator:
Calculates your gross monthly income.
Determines the maximum monthly debt payment allowed based on the 36% back-end ratio.
Subtracts your existing monthly debt payments from this maximum to find the maximum PITI you can afford according to the back-end ratio.
Calculates the maximum PITI allowed based on the 28% front-end ratio.
Takes the lower of these two PITI figures as your affordable monthly housing payment.
Uses mortgage payment formulas to estimate the maximum loan amount you can qualify for with this PITI, given the interest rate and loan term.
Adds your down payment to the estimated maximum loan amount to provide an estimated maximum home price you can afford.
Important Considerations:
This calculator provides an estimate only. Actual mortgage approval depends on many factors, including:
Your credit score and credit history.
The specific lender's underwriting guidelines.
The amount of cash reserves you have.
Property taxes and homeowner's insurance costs in your desired area.
Private Mortgage Insurance (PMI) if your down payment is less than 20%.
Appraisal value of the home.
It is always recommended to speak with a mortgage lender or financial advisor for a personalized assessment of your home-buying capacity.