.calculator-container {
font-family: sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 500px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-title {
text-align: center;
margin-bottom: 20px;
color: #333;
}
.calculator-inputs {
display: grid;
grid-template-columns: 1fr;
gap: 15px;
}
.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: 1rem;
}
.calculator-button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 1.1rem;
cursor: pointer;
margin-top: 20px;
transition: background-color 0.3s ease;
}
.calculator-button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 25px;
padding: 15px;
border: 1px solid #e0e0e0;
border-radius: 5px;
background-color: #fff;
font-size: 1.1rem;
color: #333;
text-align: center;
}
.calculator-result strong {
color: #007bff;
}
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 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(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTerm) || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// — Mortgage Affordability Calculation Logic —
// Lenders typically use the 28/36 rule:
// 28% of gross monthly income for housing costs (PITI: Principal, Interest, Taxes, Insurance)
// 36% of gross monthly income for total debt payments (including PITI)
var grossMonthlyIncome = annualIncome / 12;
// Calculate maximum allowed monthly housing payment based on the 28% rule
var maxHousingPayment28PercentRule = grossMonthlyIncome * 0.28;
// Calculate maximum allowed total monthly debt based on the 36% rule
var maxTotalDebt36PercentRule = grossMonthlyIncome * 0.36;
// The maximum PITI cannot exceed the lesser of these two rules.
// However, the 36% rule already includes existing debt, so we need to subtract existing debt from it
// to find the maximum PITI allowed under the 36% rule.
var maxPITI_36PercentRule = maxTotalDebt36PercentRule – monthlyDebt;
// The actual maximum PITI is the lower of the two limits
var maxPITI = Math.min(maxHousingPayment28PercentRule, maxPITI_36PercentRule);
// Ensure maxPITI is not negative (e.g., if monthly debt is very high)
if (maxPITI 0)
if (monthlyInterestRate > 0 && numberOfPayments > 0) {
var rateFactor = Math.pow(1 + monthlyInterestRate, numberOfPayments);
var numerator = monthlyInterestRate * rateFactor;
var denominator = rateFactor – 1;
if (denominator > 0) {
// Rearranging the formula to solve for P: P = M * [ (1 + i)^n – 1] / [ i(1 + i)^n ]
maximumLoanAmount = maxPITI * denominator / numerator;
} else if (maxPITI === 0) {
maximumLoanAmount = 0; // If max PITI is 0, loan amount is 0
}
} else if (monthlyInterestRate === 0 && numberOfPayments > 0) {
// Special case for 0% interest: Loan amount is simply maxPITI * number of payments
maximumLoanAmount = maxPITI * numberOfPayments;
}
// The maximum affordable home price is the loan amount plus the down payment.
var maxAffordableHomePrice = maximumLoanAmount + downPayment;
// Format results for display
var formattedMaxPITI = maxPITI.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxLoanAmount = maximumLoanAmount.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxHomePrice = maxAffordableHomePrice.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedGrossMonthlyIncome = grossMonthlyIncome.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxHousingPayment28PercentRule = maxHousingPayment28PercentRule.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxTotalDebt36PercentRule = maxTotalDebt36PercentRule.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMonthlyDebt = monthlyDebt.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = `
Based on your inputs:
Gross Monthly Income: ${formattedGrossMonthlyIncome}
Maximum Monthly Housing Payment (PITI) Allowed (28% Rule): ${formattedMaxHousingPayment28PercentRule}
Maximum Total Monthly Debt Allowed (36% Rule): ${formattedMaxTotalDebt36PercentRule}
Your Existing Monthly Debt Payments: ${formattedMonthlyDebt}
Maximum PITI Your Income Can Support (considering 36% rule minus existing debt): ${formattedPITI_36PercentRule.toLocaleString(undefined, { style: 'currency', currency: 'USD' })}Your Estimated Maximum Affordable Monthly PITI: ${formattedMaxPITI}
Estimated Maximum Loan Amount: ${formattedMaxLoanAmount}Estimated Maximum Affordable Home Price: ${formattedMaxHomePrice}
Note: This is an estimate and does not include property taxes, homeowner's insurance, or potential PMI (Private Mortgage Insurance), which will increase your actual monthly payment and affect affordability. Lender approval depends on various factors.
`;
}
Understanding Mortgage Affordability
Securing a mortgage is a significant step towards homeownership, but understanding how much you can realistically afford is crucial. Mortgage affordability calculators help prospective buyers estimate the maximum loan amount and home price they can qualify for, taking into account their income, existing debts, and the potential costs associated with a mortgage.
Key Factors in Mortgage Affordability
Lenders assess your ability to repay a mortgage based on several key financial metrics. Two of the most commonly used guidelines are the 28/36 rule:
The 28% Rule (Front-End Ratio): This rule suggests that your total monthly housing costs, known as PITI (Principal, Interest, Taxes, and Insurance), should not exceed 28% of your gross monthly income. This is the income before taxes and other deductions.
The 36% Rule (Back-End Ratio): This rule states that your total monthly debt obligations, including your potential PITI payment plus all other recurring debts (like car loans, student loans, credit card minimum payments), should not exceed 36% of your gross monthly income.
Lenders typically consider both rules, and you must qualify under whichever is more stringent for your financial situation. The maximum PITI you can afford is generally the lower of the two limits derived from these rules.
How the Calculator Works
Our Mortgage Affordability Calculator simplifies this process:
Gross Monthly Income: It first calculates your gross monthly income by dividing your annual income by 12.
Maximum Housing Payment (28% Rule): It determines the maximum monthly housing payment (PITI) you can afford based on 28% of your gross monthly income.
Maximum Total Debt (36% Rule): It calculates the maximum total monthly debt you can handle, including PITI, which is capped at 36% of your gross monthly income.
Calculating Allowable PITI: From the maximum total debt allowed under the 36% rule, it subtracts your existing monthly debt payments (car loans, student loans, credit cards, etc.) to find the maximum PITI you can afford while staying within the 36% limit.
Determining Maximum PITI: The calculator then identifies the lower PITI amount from the 28% rule and the calculated PITI from the 36% rule. This lower figure is your estimated maximum affordable PITI.
Estimating Maximum Loan Amount: Using the maximum affordable PITI, along with the provided estimated interest rate and loan term, the calculator employs the standard mortgage payment formula (M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]) and rearranges it to solve for the principal loan amount (P).
Calculating Maximum Home Price: Finally, it adds your specified down payment to the estimated maximum loan amount to arrive at your estimated maximum affordable home price.
Important Considerations
While this calculator provides a valuable estimate, it's essential to remember:
Estimates Only: This is a simplified model. Actual mortgage approvals depend on a lender's specific underwriting criteria, your credit score, employment history, debt-to-income ratio, and market conditions.
Exclusions: The calculation for PITI typically excludes property taxes and homeowner's insurance in the initial phase, as these can vary widely by location and property. If these are included in the input or need to be factored into a more precise estimate, they would be added to the calculated monthly payment. Furthermore, Private Mortgage Insurance (PMI) is often required if your down payment is less than 20% and significantly increases your monthly payment.
Closing Costs: Don't forget to budget for closing costs, which can range from 2% to 5% of the loan amount.
Affordability vs. Qualification: Just because you can afford a certain monthly payment doesn't mean a lender will approve you for that amount. Lenders have strict qualification requirements.
Use this calculator as a starting point for your home-buying journey. For precise figures and pre-approval, consult with a mortgage lender or financial advisor.