.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 #ccc;
border-radius: 4px;
font-size: 16px;
}
.calculator-container button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
border: 1px solid #d4edda;
background-color: #e9f7ef;
color: #155724;
border-radius: 4px;
text-align: center;
font-size: 1.1em;
}
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 propertyTaxes = parseFloat(document.getElementById("propertyTaxes").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
// Basic input validation
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(propertyTaxes) || isNaN(homeInsurance) || isNaN(privateMortgageInsurance)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate < 0 || loanTerm <= 0 || propertyTaxes < 0 || homeInsurance < 0 || privateMortgageInsurance < 0) {
resultDiv.innerHTML = "Please enter positive values where appropriate.";
return;
}
// Common lender debt-to-income ratios
var maxFrontEndRatio = 0.28; // Typically 28% of gross monthly income for PITI
var maxBackEndRatio = 0.36; // Typically 36% of gross monthly income for PITI + other debts
var monthlyIncome = annualIncome / 12;
var maxMonthlyHousingPayment = monthlyIncome * maxFrontEndRatio;
var maxTotalDebtPayment = monthlyIncome * maxBackEndRatio;
// Calculate maximum allowable monthly mortgage payment (P&I)
var maxMonthlyPrincipalAndInterest = maxTotalDebtPayment – monthlyDebt;
if (maxMonthlyPrincipalAndInterest 0) {
maxLoanAmount = maxMonthlyPrincipalAndInterest * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else { // Handle 0% interest rate case (unlikely for mortgages but for completeness)
maxLoanAmount = maxMonthlyPrincipalAndInterest * numberOfPayments;
}
// Calculate the maximum affordable home price
var affordableHomePrice = maxLoanAmount + downPayment;
// Estimate monthly PITI (Principal, Interest, Taxes, Insurance)
var monthlyPropertyTaxes = propertyTaxes / 12;
var monthlyHomeInsurance = homeInsurance / 12;
var totalMonthlyHousingCosts = maxMonthlyPrincipalAndInterest + monthlyPropertyTaxes + monthlyHomeInsurance + privateMortgageInsurance;
var displayMaxLoan = maxLoanAmount.toFixed(2);
var displayAffordablePrice = affordableHomePrice.toFixed(2);
var displayMaxMonthlyPITI = totalMonthlyHousingCosts.toFixed(2);
resultDiv.innerHTML =
"Estimated Maximum Affordable Home Price: $" + displayAffordablePrice + "" +
"Estimated Maximum Loan Amount: $" + displayMaxLoan + "" +
"Estimated Maximum Monthly PITI (Principal, Interest, Taxes, Insurance, PMI): $" + displayMaxMonthlyPITI + "" +
"Note: These are estimates. Actual loan approval depends on lender underwriting, credit score, and other factors. This calculation assumes a front-end ratio of " + (maxFrontEndRatio * 100) + "% and a back-end ratio of " + (maxBackEndRatio * 100) + "%.";
}
Understanding Mortgage Affordability
Deciding to buy a home is one of the biggest financial decisions you'll make. A crucial step in this process is understanding how much house you can realistically afford. Lenders use various metrics to determine this, primarily focusing on your Debt-to-Income (DTI) ratio. This calculator helps you estimate your potential mortgage affordability.
Key Factors in Mortgage Affordability:
Annual Household Income: This is the combined gross income of all borrowers. Lenders use this as the foundation for calculating your DTI.
Total Monthly Debt Payments: This includes all your recurring monthly debts, such as car loans, student loans, credit card minimum payments, and any other loan obligations. It does NOT typically include rent or utilities, but lenders will consider it when assessing your overall financial health.
Down Payment: The upfront cash you pay towards the home purchase. A larger down payment reduces the loan amount needed and can lead to better loan terms, potentially increasing your affordability.
Estimated Interest Rate: The annual interest rate you expect to pay on the mortgage. Higher interest rates mean higher monthly payments for the same loan amount, reducing affordability.
Loan Term: The length of time over which you'll repay the loan, usually in years (e.g., 15, 30 years). Longer terms result in lower monthly payments but more interest paid over the life of the loan.
Property Taxes: Annual taxes levied by local government on your property. These are paid monthly as part of your mortgage payment (escrow).
Homeowner's Insurance: Insurance to protect your home against damage. This is also typically paid monthly through escrow.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's price, lenders usually require PMI to protect them against default. This adds to your monthly housing cost.
How the Calculator Works:
This calculator uses common lender guidelines to estimate affordability. It typically looks at two DTI ratios:
Front-End Ratio (Housing Ratio): This ratio compares your potential total monthly housing costs (Principal, Interest, Property Taxes, Home Insurance, and PMI – often called PITI + PMI) to your gross monthly income. A common guideline is that this 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 PITI + PMI and all other recurring debts) to your gross monthly income. A common guideline is that this should not exceed 36% of your gross monthly income.
The calculator determines the maximum monthly payment you can afford based on these ratios and then calculates the maximum loan amount and subsequently the maximum home price you could potentially afford, given your down payment.
Important Considerations:
While this calculator provides a useful estimate, it's essential to remember:
Lender Variability: Different lenders have slightly different DTI thresholds and underwriting criteria.
Credit Score: Your credit score significantly impacts the interest rate you'll qualify for and the loan programs available to you.
Other Costs: Don't forget closing costs, moving expenses, potential home repairs, and ongoing maintenance.
Personal Budget: The "affordable" amount isn't always the "comfortable" amount. Consider your lifestyle and financial goals beyond just making the mortgage payment.
For a precise figure and to understand your loan options, it's always best to speak with a mortgage lender or broker.