Mortgage Affordability Calculator
.calculator-container {
font-family: sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 600px;
margin: 20px auto;
background-color: #f9f9f9;
}
.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;
font-size: 0.9em;
}
.input-group input {
padding: 8px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1em;
}
button {
grid-column: 1 / -1;
padding: 10px 15px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 1.1em;
cursor: pointer;
transition: background-color 0.3s ease;
}
button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
background-color: #e9ecef;
border: 1px solid #dee2e6;
border-radius: 4px;
text-align: center;
font-size: 1.1em;
}
.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 interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) ||
annualIncome < 0 || monthlyDebt < 0 || downPayment < 0 || interestRate < 0 || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Lenders often use a Debt-to-Income (DTI) ratio.
// Front-end DTI (housing + debt) is typically around 28-36% of gross monthly income.
// Back-end DTI (all debt including PITI) is typically around 36-43% of gross monthly income.
// We'll use a conservative estimate of 30% for P&I + taxes & insurance for affordability.
var grossMonthlyIncome = annualIncome / 12;
var maxMonthlyHousingPayment = grossMonthlyIncome * 0.30; // Using 30% of gross monthly income for PITI
var maxTotalDebtPayment = grossMonthlyIncome * 0.43; // Using 43% of gross monthly income for total debt (PITI + other debt)
var allowedMonthlyMortgagePayment = maxTotalDebtPayment – monthlyDebt;
if (allowedMonthlyMortgagePayment 0) {
var numerator = monthlyInterestRate * Math.pow((1 + monthlyInterestRate), numberOfMonths);
var denominator = Math.pow((1 + monthlyInterestRate), numberOfMonths) – 1;
maxLoanAmount = allowedMonthlyMortgagePayment * (denominator / numerator);
} else {
// Handle zero interest rate case
maxLoanAmount = allowedMonthlyMortgagePayment * numberOfMonths;
}
// Add down payment to get estimated maximum home price
var estimatedMaxHomePrice = maxLoanAmount + downPayment;
// Estimate property taxes and homeowner's insurance as a percentage of home price
// These are rough estimates, actual costs vary widely by location.
var estimatedAnnualTaxes = estimatedMaxHomePrice * 0.01; // 1% of home price
var estimatedAnnualInsurance = estimatedMaxHomePrice * 0.004; // 0.4% of home price
// Recalculate maximum allowed PITI based on total debt DTI
var PITI = maxTotalDebtPayment – monthlyDebt;
// Recalculate loan amount and max home price based on PITI if it's lower than the initial calculation
// This is an iterative refinement to ensure total debt DTI is met.
var refinedMaxLoanAmount = 0;
if (monthlyInterestRate > 0) {
var numerator = monthlyInterestRate * Math.pow((1 + monthlyInterestRate), numberOfMonths);
var denominator = Math.pow((1 + monthlyInterestRate), numberOfMonths) – 1;
refinedMaxLoanAmount = PITI * (denominator / numerator);
} else {
refinedMaxLoanAmount = PITI * numberOfMonths;
}
var refinedEstimatedMaxHomePrice = refinedMaxLoanAmount + downPayment;
// Check if estimated housing costs (PITI) exceed the primary affordability threshold
var estimatedMonthlyTaxes = estimatedAnnualTaxes / 12;
var estimatedMonthlyInsurance = estimatedAnnualInsurance / 12;
var estimatedMonthlyPITI = (refinedMaxLoanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfMonths)) / (Math.pow(1 + monthlyInterestRate, numberOfMonths) – 1)) + estimatedMonthlyTaxes + estimatedMonthlyInsurance;
if (estimatedMonthlyPITI > maxMonthlyHousingPayment && refinedMaxHomePrice > 0) {
// If PITI based on total debt DTI is higher than initial housing DTI,
// we need to cap the home price based on the housing DTI.
// This requires solving for the loan amount where PITI = maxMonthlyHousingPayment
// This is complex and often done iteratively or with financial functions.
// For simplicity, we'll flag this and state the limitation.
var affordableLoanAmountBasedOnHousing = 0;
if (monthlyInterestRate > 0) {
var numerator = monthlyInterestRate * Math.pow((1 + monthlyInterestRate), numberOfMonths);
var denominator = Math.pow((1 + monthlyInterestRate), numberOfMonths) – 1;
affordableLoanAmountBasedOnHousing = maxMonthlyHousingPayment * (denominator / numerator);
} else {
affordableLoanAmountBasedOnHousing = maxMonthlyHousingPayment * numberOfMonths;
}
var finalMaxHomePrice = affordableLoanAmountBasedOnHousing + downPayment;
resultDiv.innerHTML =
"Based on a
30% front-end DTI for housing costs and a
43% back-end DTI for total debt:" +
"Estimated Maximum Home Price:
$" + finalMaxHomePrice.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + "" +
"(This includes your $" + downPayment.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + " down payment)" +
"Estimated Maximum Loan Amount:
$" + affordableLoanAmountBasedOnHousing.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + "" +
"Estimated Maximum Monthly PITI (Principal, Interest, Taxes, Insurance):
$" + maxMonthlyHousingPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"
Note: Your current debt payments require a lower total housing payment than this calculation allows based on the 30% housing DTI. You may need to reduce existing debt or increase income to afford a higher-priced home. Consult a mortgage lender for precise figures.";
} else {
// If housing DTI is the limiting factor or both are met
resultDiv.innerHTML =
"Based on a
30% front-end DTI for housing costs and a
43% back-end DTI for total debt:" +
"Estimated Maximum Home Price:
$" + refinedEstimatedMaxHomePrice.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + "" +
"(This includes your $" + downPayment.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + " down payment)" +
"Estimated Maximum Loan Amount:
$" + refinedMaxLoanAmount.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + "" +
"Estimated Maximum Monthly PITI (Principal, Interest, Taxes, Insurance):
$" + PITI.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"
Disclaimer: This is an estimate. Actual loan approval depends on lender criteria, credit score, property specifics, and current market conditions. Consult with a mortgage professional.";
}
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the home-buying process. A mortgage affordability calculator helps you estimate the maximum loan amount and home price you might qualify for based on your financial situation. Lenders use several key metrics to assess your borrowing capacity, primarily your Debt-to-Income (DTI) ratio.
Debt-to-Income (DTI) Ratio Explained
Your DTI ratio compares your recurring monthly debt payments to your gross monthly income (income before taxes and other deductions). Lenders typically look at two types of DTI ratios:
- Front-End DTI (Housing Ratio): This ratio typically considers the proposed monthly mortgage payment (including principal, interest, property taxes, and homeowner's insurance – often called PITI) as a percentage of your gross monthly income. Many lenders prefer this to be no more than 28% to 31%.
- Back-End DTI (Total Debt Ratio): This ratio includes all of your recurring monthly debt payments – including your estimated PITI, credit card minimums, auto loans, student loans, and any other installment debt – as a percentage of your gross monthly income. This ratio is often capped at around 36% to 43%, though some lenders may go higher.
How the Calculator Works
This calculator uses common DTI benchmarks to provide an estimate:
- It first calculates your gross monthly income by dividing your annual income by 12.
- It then determines the maximum allowable monthly housing payment (PITI) based on a front-end DTI (e.g., 30% of gross monthly income).
- It also calculates the maximum allowable total monthly debt payment based on a back-end DTI (e.g., 43% of gross monthly income).
- Your existing monthly debt payments are subtracted from the maximum total debt payment to determine the maximum amount you can afford for PITI.
- Using mortgage interest rate and loan term, the calculator estimates the maximum loan amount you can support with the calculated monthly PITI.
- Finally, it adds your down payment to the maximum loan amount to estimate the maximum home price you might afford.
Important Note: This calculator provides an estimate. Actual mortgage approval depends on many factors, including your credit score, lender-specific guidelines, employment history, and the specific property you wish to purchase. It is always recommended to speak with a qualified mortgage lender or broker for personalized advice and pre-approval.