.calculator-wrapper {
font-family: sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 600px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-wrapper h2 {
text-align: center;
color: #333;
margin-bottom: 20px;
}
.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: #555;
}
.input-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
}
.calculator-wrapper button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #4CAF50;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-wrapper button:hover {
background-color: #45a049;
}
#result {
margin-top: 20px;
padding: 15px;
border: 1px dashed #4CAF50;
background-color: #e8f5e9;
border-radius: 4px;
text-align: center;
font-size: 18px;
font-weight: bold;
color: #333;
}
#result span {
color: #4CAF50;
}
function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var existingDebt = parseFloat(document.getElementById("existingDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var propertyTaxRate = parseFloat(document.getElementById("propertyTaxRate").value);
var homeInsurance = parseFloat(document.getElementById("homeInsurance").value);
var privateMortgageInsurance = parseFloat(document.getElementById("privateMortgageInsurance").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Validate inputs
if (isNaN(annualIncome) || isNaN(existingDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(propertyTaxRate) || isNaN(homeInsurance) || isNaN(privateMortgageInsurance)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (annualIncome <= 0 || existingDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTerm <= 0 || propertyTaxRate < 0 || homeInsurance < 0 || privateMortgageInsurance < 0) {
resultDiv.innerHTML = "Please enter positive values where applicable.";
return;
}
// Rule of thumb: Housing costs (PITI) should not exceed 28% of gross monthly income.
// Gross monthly income = annual income / 12
var grossMonthlyIncome = annualIncome / 12;
var maxMonthlyHousingCost = grossMonthlyIncome * 0.28;
// Rule of thumb: Total debt payments (including mortgage PITI) should not exceed 36% of gross monthly income.
var maxTotalMonthlyDebt = grossMonthlyIncome * 0.36;
var maxMortgagePiti = maxTotalMonthlyDebt – existingDebt;
// Use the more conservative maximum for PITI
var affordableMaxPiti = Math.min(maxMonthlyHousingCost, maxMortgagePiti);
if (affordableMaxPiti <= 0) {
resultDiv.innerHTML = "Based on the 28/36 rule, your estimated maximum monthly mortgage payment (PITI) is too low to afford a home with your current income and debt. You may need to increase income, reduce debt, or consider a lower-priced home.";
return;
}
// Estimate maximum loan amount based on affordable PITI
// PITI = Principal + Interest + Taxes + Insurance + PMI
// PITI = MonthlyMortgagePayment + MonthlyPropertyTax + MonthlyHomeInsurance + MonthlyPMI
var monthlyPropertyTax = (propertyTaxRate / 100) * 100000 / 12; // Assuming a hypothetical $100k home value for tax calculation initially, will refine.
var monthlyHomeInsurance = homeInsurance / 12;
var monthlyPMI = privateMortgageInsurance / 12;
// We need to solve for the loan amount where the calculated PITI equals the affordableMaxPiti.
// This is an iterative process or can be solved algebraically, but it's complex due to the mortgage payment formula.
// A simpler approach is to estimate and refine, or to calculate the maximum loan based on a target P&I payment.
// Let's estimate the maximum affordable monthly P&I payment
var affordableMaxPI = affordableMaxPiti – (monthlyPropertyTax + monthlyHomeInsurance + monthlyPMI);
if (affordableMaxPI 0) {
var numerator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
maxLoanAmount = affordableMaxPI * (numerator / denominator);
} else {
// Handle zero interest rate case (though unlikely for mortgages)
maxLoanAmount = affordableMaxPI * numberOfPayments;
}
// The maximum home price is the max loan amount plus the down payment
var maxHomePrice = maxLoanAmount + downPayment;
// Format results
var formattedMaxHomePrice = maxHomePrice.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 });
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 });
var formattedAffordableMaxPiti = affordableMaxPiti.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
resultDiv.innerHTML = "Based on the 28% of gross income for housing costs and 36% for total debt obligations:" +
"Your estimated maximum monthly mortgage payment (PITI) is: $" + formattedAffordableMaxPiti + "" +
"This supports a maximum loan amount of approximately: $" + formattedMaxLoanAmount + "" +
"Considering your down payment of $" + downPayment.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + ", " +
"your estimated maximum affordable home price is: $" + formattedMaxHomePrice + "";
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the home-buying process. It's not just about the mortgage payment itself, but also about how that payment fits into your overall financial picture. Lenders and financial advisors often use established guidelines, commonly referred to as the "28/36 rule," to assess affordability.
The 28/36 Rule:
28% Rule (Front-End Ratio): This guideline suggests that your total housing costs, including the principal and interest payment on your mortgage (P&I), property taxes, homeowners insurance, and any private mortgage insurance (PMI) – collectively known as PITI – should not exceed 28% of your gross monthly income.
36% Rule (Back-End Ratio): This broader guideline states that your total monthly debt obligations, including your estimated PITI payment plus all other recurring monthly debts (like car loans, student loans, and credit card minimum payments), should not exceed 36% of your gross monthly income.
Lenders will typically qualify you based on whichever ratio is more restrictive. This calculator uses both rules to provide a more comprehensive affordability estimate.
Key Components of Your Monthly Housing Costs (PITI):
Principal & Interest (P&I): This is the core mortgage payment that goes towards paying down the loan balance and covering the interest charged by the lender. The amount you pay each month is determined by your loan amount, interest rate, and loan term.
Taxes: Property taxes are levied by local governments and are usually paid annually. Lenders often collect these on your behalf in monthly installments and hold them in an escrow account.
Insurance: Homeowners insurance protects you against damage to your property and liability. Like property taxes, lenders typically collect this monthly for your escrow account.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's purchase price, lenders usually require PMI to protect themselves against the increased risk of default. This is an additional monthly cost.
How This Calculator Works:
This calculator first determines your maximum affordable monthly housing payment (PITI) based on the 28/36 rule. It then subtracts your estimated monthly costs for property taxes, homeowners insurance, and PMI to find the maximum amount you can allocate to your principal and interest (P&I) payment. Using this P&I amount, the calculator estimates the largest loan you could qualify for. Finally, it adds your down payment to this loan amount to give you an estimate of the maximum home price you can afford.
Important Considerations:
This is an estimate based on common lending guidelines. Actual loan approval depends on many factors, including your credit score, debt-to-income ratio, employment history, and the specific lender's criteria.
Closing costs, such as appraisal fees, title insurance, and loan origination fees, are not included in this affordability calculation but are an important part of the home-buying budget.
Home prices, property taxes, and insurance costs can vary significantly by location.
Consider your personal comfort level. Some individuals may prefer to spend less on housing than the maximum allowed by lenders to have more financial flexibility for other goals.