Use this calculator to estimate the maximum mortgage you can afford. This is a crucial step in the home-buying process, helping you set a realistic budget and avoid overspending.
.calculator-container {
font-family: Arial, sans-serif;
max-width: 500px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
background-color: #f9f9f9;
}
.input-section {
margin-bottom: 15px;
}
.input-section label {
display: block;
margin-bottom: 5px;
font-weight: bold;
}
.input-section input[type="number"] {
width: calc(100% – 22px);
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
}
button {
background-color: #4CAF50;
color: white;
padding: 12px 20px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 16px;
margin-top: 10px;
}
button:hover {
background-color: #45a049;
}
.result-section {
margin-top: 20px;
padding: 15px;
border: 1px solid #ddd;
border-radius: 4px;
background-color: #e9e9e9;
text-align: center;
font-size: 1.1em;
font-weight: bold;
}
function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Validate inputs
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(annualInterestRate) || isNaN(loanTermYears)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || annualInterestRate <= 0 || loanTermYears <= 0) {
resultDiv.innerHTML = "Please enter positive values for income, interest rate, and loan term, and non-negative values for debt and down payment.";
return;
}
// Lender's Debt-to-Income (DTI) Ratio Guidelines – General Rule of Thumb
// Front-end DTI (Housing Costs / Gross Income) should ideally be below 28%
// Back-end DTI (Housing Costs + Other Debts / Gross Income) should ideally be below 36%
// For this calculator, we'll use a simplified approach estimating affordability based on a max monthly payment.
// A common guideline is that monthly housing costs (P&I, taxes, insurance) shouldn't exceed 28% of gross monthly income.
// And total debt payments (including housing) shouldn't exceed 36% of gross monthly income.
var grossMonthlyIncome = annualIncome / 12;
var maxTotalMonthlyObligation = grossMonthlyIncome * 0.36; // Using 36% as a common back-end DTI
var maxMonthlyHousingPayment = grossMonthlyIncome * 0.28; // Using 28% as a common front-end DTI
var allowedMonthlyDebtPayments = maxTotalMonthlyObligation – monthlyDebt;
// We'll aim for the maximum of these two to determine the mortgage affordability
// This means the maximum P&I payment we can afford is limited by the lower of:
// 1. The total allowed housing payment (28% DTI)
// 2. The remaining capacity after other debts (36% DTI)
var maxMonthlyPrincipalAndInterest = Math.min(maxMonthlyHousingPayment, allowedMonthlyDebtPayments);
if (maxMonthlyPrincipalAndInterest 0) {
// Mortgage Payment Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Rearranging to solve for P (Principal Loan Amount):
// P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ]
var numerator = Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths);
maxLoanAmount = maxMonthlyPrincipalAndInterest * (numerator / denominator);
} else {
// Handle zero interest rate case (though unlikely for mortgages)
maxLoanAmount = maxMonthlyPrincipalAndInterest * loanTermMonths;
}
var maxMortgageAffordability = maxLoanAmount + downPayment;
resultDiv.innerHTML = "Estimated Maximum Mortgage Affordability: $" + maxMortgageAffordability.toFixed(2) + "" +
"Estimated Maximum Loan Amount: $" + maxLoanAmount.toFixed(2) + "" +
"Max Monthly P&I Payment: $" + maxMonthlyPrincipalAndInterest.toFixed(2);
}