Mortgage Affordability Calculator
Understanding how much you can afford to borrow for a mortgage is a crucial step in the home-buying process. This calculator helps you estimate your potential mortgage affordability by considering your income, debts, and desired down payment. It's important to remember that this is an estimate, and your actual loan approval will depend on a lender's detailed assessment of your financial situation, creditworthiness, and the specific loan product you choose.
Key Factors Influencing Affordability:
- Gross Monthly Income: Your total income before taxes and deductions. Lenders often use a debt-to-income ratio (DTI) to assess this.
- Existing Monthly Debt Payments: This includes credit card payments, student loans, car loans, personal loans, and any other recurring debt obligations.
- Desired Down Payment: The amount of money you plan to pay upfront. A larger down payment reduces the loan amount needed and can improve your loan terms.
- Estimated Interest Rate: The annual interest rate you expect to pay on the mortgage. Higher rates mean higher monthly payments.
- Loan Term: The duration of the mortgage, typically 15 or 30 years. Shorter terms result in higher monthly payments but less interest paid overall.
function calculateAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var existingMonthlyDebt = parseFloat(document.getElementById("existingMonthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value) / 100;
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(grossMonthlyIncome) || isNaN(existingMonthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
// Lender's typical DTI limits (these can vary)
var maxDTI = 0.43; // Common maximum for front-end ratio (housing) is often around 28-31%, back-end (total debt) around 36-43%. We'll use a common back-end.
var housingRatio = 0.28; // Typical front-end ratio (principal, interest, taxes, insurance)
// Calculate maximum allowable monthly housing payment
var maxTotalDebtPayment = grossMonthlyIncome * maxDTI;
var maxHousingPayment = maxTotalDebtPayment – existingMonthlyDebt;
if (maxHousingPayment 0) {
maxLoanAmount = maxHousingPayment * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else {
// Handle zero interest rate case (though unlikely for mortgages)
maxLoanAmount = maxHousingPayment * numberOfPayments;
}
// Calculate estimated maximum home price
var estimatedMaxHomePrice = maxLoanAmount + downPayment;
// Display results
resultDiv.innerHTML =
"
Estimated Affordability
" +
"
Maximum Allowable Monthly Housing Payment (PITI): $" + maxHousingPayment.toFixed(2) + "" +
"
Estimated Maximum Loan Amount: $" + maxLoanAmount.toFixed(2) + "" +
"
Estimated Maximum Home Price (with your down payment): $" + estimatedMaxHomePrice.toFixed(2) + "";
}
.calculator-container {
font-family: Arial, sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 600px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-container h2 {
text-align: center;
color: #333;
margin-bottom: 15px;
}
.calculator-container p {
color: #555;
line-height: 1.6;
margin-bottom: 20px;
}
.calculator-container ul {
margin-left: 20px;
margin-bottom: 20px;
}
.calculator-container li {
margin-bottom: 8px;
}
.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: #444;
}
.input-group input,
.input-group select {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1rem;
}
.calculator-container button {
grid-column: 1 / -1; /* Span across all columns if grid is used */
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 1.1rem;
cursor: pointer;
transition: background-color 0.3s ease;
margin-top: 10px;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 25px;
padding: 15px;
border: 1px dashed #007bff;
border-radius: 4px;
background-color: #e7f3ff;
text-align: center;
}
.calculator-result h3 {
margin-top: 0;
color: #0056b3;
margin-bottom: 10px;
}
.calculator-result p {
margin-bottom: 8px;
font-size: 1.1rem;
color: #333;
}