Mortgage Affordability Calculator
.calculator-wrapper {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #e0e0e0;
border-radius: 8px;
box-shadow: 0 2px 5px rgba(0,0,0,0.1);
}
.calculator-form {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 15px;
margin-bottom: 20px;
}
.form-group {
display: flex;
flex-direction: column;
}
.form-group label {
margin-bottom: 5px;
font-weight: bold;
color: #333;
}
.form-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1rem;
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.calculator-form button {
grid-column: 1 / -1;
padding: 12px 20px;
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border-radius: 4px;
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cursor: pointer;
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background-color: #0056b3;
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.calculator-result {
margin-top: 20px;
padding: 15px;
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border: 1px solid #e0e0e0;
border-radius: 4px;
text-align: center;
font-size: 1.1rem;
color: #333;
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.calculator-result strong {
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}
Understanding Mortgage Affordability
Buying a home is one of the biggest financial decisions you'll make. Understanding how much house you can realistically afford is crucial before you start your search. Mortgage affordability isn't just about what a lender will approve you for; it's about what you can comfortably manage each month without straining your finances.
Key Factors Influencing Affordability:
- Annual Income: Your total earnings before taxes. Lenders often use a debt-to-income (DTI) ratio, where your housing costs (including mortgage, property taxes, and insurance) should ideally not exceed 28% of your gross monthly income.
- Monthly Debt Payments: This includes car loans, student loans, credit card payments, and any other recurring debts. These, combined with your potential mortgage payment, contribute to your overall DTI. Lenders typically want your total DTI (including housing) to be below 36-43%.
- Down Payment: The upfront cash you pay towards the home's purchase price. A larger down payment reduces the loan amount needed, lowers your monthly payments, and can help you avoid private mortgage insurance (PMI) if it's 20% or more.
- Interest Rate: The percentage charged by the lender on the loan. Even a small difference in interest rate can significantly impact your monthly payment and the total interest paid over the life of the loan.
- Loan Term: The number of years you have to repay the mortgage. Common terms are 15 or 30 years. Shorter terms mean higher monthly payments but less interest paid overall. Longer terms mean lower monthly payments but more interest paid over time.
How the Calculator Works:
This calculator provides an estimate of your maximum affordable mortgage amount and the corresponding maximum home price you could consider. It uses the common "front-end" DTI ratio (housing costs = 28% of gross monthly income) and a "back-end" DTI ratio (total debt = 36% of gross monthly income) as a guideline, alongside your provided interest rate and loan term. It then calculates the maximum loan amount you could potentially service based on these inputs, and adds your down payment to estimate the maximum home price.
Please Note: This is an estimation tool. Actual loan approval and amounts may vary based on lender policies, credit score, other financial factors, and current market conditions.
Example Calculation:
Let's say you have an Annual Income of $90,000. Your Total Monthly Debt Payments (car loan, student loan) are $500. You have a Down Payment of $40,000. You're looking at an estimated Annual Interest Rate of 6.5%, with a Loan Term of 30 years.
The calculator would first determine your maximum monthly housing payment based on the 28% rule and then factor in your existing debts for the 36% rule. It would then calculate the maximum loan principal you could afford with the given interest rate and term, and finally, add your down payment to suggest a potential maximum home price.
function calculateAffordability() {
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)) {
resultDiv.innerHTML = "
Error: Please enter valid numbers for all fields.";
return;
}
// — Calculations —
// Assume 28% DTI for PITI (Principal, Interest, Taxes, Insurance)
var grossMonthlyIncome = annualIncome / 12;
var maxPitiPayment = grossMonthlyIncome * 0.28;
// Assume 36% DTI for total debt (PITI + other debts)
var maxTotalDebtPayment = grossMonthlyIncome * 0.36;
// Calculate maximum allowed monthly mortgage payment (P&I only)
// We need to subtract taxes and insurance from maxPitiPayment to get P&I allowance.
// For simplicity in this calculator, we'll estimate P&I based on a portion,
// or use the back-end DTI which is often more restrictive for P&I.
// Let's use the more conservative back-end DTI to calculate P&I allowance.
var maxMortgagePaymentAllowed = maxTotalDebtPayment – monthlyDebt;
if (maxMortgagePaymentAllowed < 0) {
resultDiv.innerHTML = "
Result: Based on your current debt, you may not qualify for additional mortgage payments.";
return;
}
// Convert annual interest rate to monthly interest rate
var monthlyInterestRate = (interestRate / 100) / 12;
// Convert loan term from years to months
var loanTermMonths = loanTerm * 12;
var maxLoanAmount = 0;
// Calculate max loan amount using the mortgage payment formula:
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where:
// M = Monthly Payment (maxMortgagePaymentAllowed)
// P = Principal Loan Amount (what we want to find)
// i = Monthly Interest Rate (monthlyInterestRate)
// n = Loan Term in Months (loanTermMonths)
// Rearranging for P: P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ]
if (monthlyInterestRate > 0) {
var numerator = Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths);
if (denominator > 0) {
maxLoanAmount = maxMortgagePaymentAllowed * (numerator / denominator);
} else {
maxLoanAmount = 0; // Avoid division by zero if denominator is unexpectedly zero
}
} else {
// If interest rate is 0%, monthly payment is just principal
if (loanTermMonths > 0) {
maxLoanAmount = maxMortgagePaymentAllowed * loanTermMonths;
} else {
maxLoanAmount = 0; // Avoid division by zero if loan term is zero
}
}
// Ensure loan amount is not negative due to calculation edge cases
maxLoanAmount = Math.max(0, maxLoanAmount);
// Calculate maximum affordable home price
var maxHomePrice = maxLoanAmount + downPayment;
// Format currency
var formatCurrency = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = "
Estimated Maximum Affordable Home Price: " + formatCurrency.format(maxHomePrice) +
"
Estimated Maximum Loan Amount: " + formatCurrency.format(maxLoanAmount) +
"
(Based on 28% front-end DTI and 36% back-end DTI limits)";
}