#mortgage-calculator-container {
font-family: sans-serif;
border: 1px solid #ddd;
padding: 20px;
border-radius: 8px;
max-width: 600px;
margin: 20px auto;
background-color: #f9f9f9;
}
#mortgage-calculator-form h2,
#mortgage-calculator-result h3 {
text-align: center;
color: #333;
margin-bottom: 20px;
}
.form-group {
margin-bottom: 15px;
}
.form-group label {
display: block;
margin-bottom: 5px;
font-weight: bold;
color: #555;
}
.form-group input[type="number"] {
width: calc(100% – 22px);
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
box-sizing: border-box;
}
button {
background-color: #4CAF50;
color: white;
padding: 10px 15px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 16px;
width: 100%;
margin-top: 10px;
}
button:hover {
background-color: #45a049;
}
#mortgage-calculator-result {
margin-top: 25px;
text-align: center;
border-top: 1px solid #eee;
padding-top: 20px;
}
#maxMortgageResult,
#maxHomePriceResult {
font-size: 1.4em;
font-weight: bold;
color: #007bff;
}
function calculateMortgageAffordability() {
var monthlyIncome = parseFloat(document.getElementById("monthlyIncome").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 maxMonthlyPayment = 0;
var maxMortgage = 0;
var maxHomePrice = 0;
// Input validation
if (isNaN(monthlyIncome) || monthlyIncome <= 0 ||
isNaN(existingDebt) || existingDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTerm) || loanTerm <= 0) {
document.getElementById("maxMortgageResult").innerText = "Please enter valid numbers.";
document.getElementById("maxHomePriceResult").innerText = "";
return;
}
// Lender guidelines typically suggest a Debt-to-Income (DTI) ratio.
// A common guideline is that your total monthly debt payments (including the new mortgage)
// should not exceed 43% of your gross monthly income.
var maxDTI = 0.43;
var maxAllowedTotalDebt = monthlyIncome * maxDTI;
maxMonthlyPayment = maxAllowedTotalDebt – existingDebt;
// Ensure the maximum monthly payment is not negative
if (maxMonthlyPayment 0 && numberOfPayments > 0) {
var factor = Math.pow(1 + monthlyInterestRate, numberOfPayments);
var mortgageAmountFactor = (factor – 1) / (monthlyInterestRate * factor);
maxMortgage = maxMonthlyPayment * mortgageAmountFactor;
} else if (maxMonthlyPayment > 0) { // Handle 0% interest rate case or 0 term (though validation prevents 0 term)
maxMortgage = maxMonthlyPayment * numberOfPayments; // Simple principal calculation if no interest
}
// Calculate the maximum home price by adding the down payment to the maximum mortgage
maxHomePrice = maxMortgage + downPayment;
// Format results
document.getElementById("maxMortgageResult").innerText = "$" + maxMortgage.toFixed(2);
document.getElementById("maxHomePriceResult").innerText = "$" + maxHomePrice.toFixed(2);
}
Understanding Mortgage Affordability
Buying a home is a significant financial decision, and understanding how much you can realistically afford is crucial. A mortgage affordability calculator helps you estimate the maximum loan amount you might qualify for based on your financial situation and lender guidelines. This, in turn, gives you an idea of the maximum home price you can target.
Key Factors in Mortgage Affordability:
- Monthly Income: This is your gross monthly income (before taxes). Lenders use this to assess your ability to make payments.
- Existing Monthly Debt Payments: This includes all your recurring monthly financial obligations, such as car loans, student loans, credit card minimum payments, and any other personal loans.
- Down Payment: The amount of money you'll pay upfront towards the home purchase. A larger down payment reduces the loan amount needed and can improve your loan terms.
- Interest Rate: The annual interest rate on the mortgage. Higher interest rates mean higher monthly payments for the same loan amount.
- Loan Term: The duration of the mortgage, typically 15 or 30 years. Shorter terms have higher monthly payments but less interest paid overall.
How the Calculator Works:
This calculator primarily uses the Debt-to-Income (DTI) ratio, a key metric lenders use. A common DTI threshold for approval is around 43% (meaning your total monthly debt payments should not exceed 43% of your gross monthly income). The calculator:
- Determines the maximum total monthly debt payment you can afford by applying the DTI percentage to your monthly income.
- Subtracts your existing monthly debt payments to find the maximum monthly mortgage payment you can handle.
- Uses a standard mortgage payment formula (amortization) to calculate the maximum loan principal you can borrow with that monthly payment, given the interest rate and loan term.
- Adds your down payment to the maximum loan principal to estimate the maximum home price you can afford.
Important Considerations:
This calculator provides an estimate. Actual loan approval depends on many other factors, including:
- Credit score
- Employment history
- Assets and savings
- Loan type (e.g., FHA, VA, Conventional)
- Property taxes and homeowner's insurance (often included in your total monthly housing payment, sometimes called PITI – Principal, Interest, Taxes, Insurance)
It's always recommended to speak with a mortgage professional or lender for a personalized pre-approval.