Calculate your potential monthly mortgage payments, considering your assets. This calculator helps you understand how leveraging certain assets might impact your borrowing capacity or down payment options.
50%
60%
70%
80%
90%
100%
This is the percentage of your asset value that can be considered towards your down payment or loan reduction.
Estimated Monthly Payment
$0.00
(Principal & Interest Only)
Understanding the Smart Asset Mortgage Calculator
This calculator is designed to help potential homeowners understand their monthly mortgage payments. A "Smart Asset Mortgage" approach involves leveraging existing assets (like stocks, bonds, or other liquid investments) to potentially increase your down payment, reduce the loan amount, or even secure more favorable loan terms. This calculator focuses on the impact of leveraging assets on the initial down payment and, consequently, the monthly Principal & Interest (P&I) payment.
How it Works:
The calculator takes into account the following inputs:
Home Purchase Price: The total cost of the property you intend to buy.
Initial Down Payment (%): The percentage of the home price you plan to pay upfront from your own cash savings.
Loan Term (Years): The duration over which you will repay the mortgage (e.g., 15, 30 years).
Annual Interest Rate (%): The yearly interest rate offered on the mortgage loan.
Total Value of Assets for Leverage ($): The market value of your liquid assets that you are considering using.
Asset Leverage Ratio (%): This represents the portion of your asset value that a lender or you consider applicable for the mortgage. For example, a 70% leverage ratio means that 70% of your asset value can be used.
The Calculation:
The core of the calculation involves determining the final loan amount after considering the impact of leveraging assets.
Calculate Initial Down Payment Amount: Initial Down Payment Amount = Home Purchase Price × (Initial Down Payment % / 100)
Calculate Potential Additional Down Payment from Assets: Additional Down Payment from Assets = Total Value of Assets for Leverage × Asset Leverage Ratio
Calculate Total Down Payment: Total Down Payment = Initial Down Payment Amount + Additional Down Payment from Assets
Calculate Loan Amount: Loan Amount = Home Purchase Price - Total Down Payment
Calculate Monthly Mortgage Payment (P&I):
The monthly payment is calculated using the standard mortgage payment formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
n = Total Number of Payments (Loan Term Years × 12)
Use Cases for Smart Asset Mortgages:
Avoiding Private Mortgage Insurance (PMI): If leveraging assets allows you to put down 20% or more of the home price, you can often avoid PMI, saving you significant monthly costs.
Securing a Lower Interest Rate: A larger down payment generally means a lower Loan-to-Value (LTV) ratio, which can qualify you for better interest rates.
Purchasing a More Expensive Home: By increasing your effective down payment, you might be able to afford a higher-priced property than initially planned.
Strategic Financial Planning: Allows homeowners to utilize their investment portfolio strategically without necessarily liquidating all assets, maintaining diversification and potential for future growth.
Disclaimer: This calculator provides an estimation for Principal & Interest only and does not include property taxes, homeowner's insurance, or potential PMI. Consult with a qualified mortgage professional and financial advisor for personalized advice.
function calculateMortgage() {
var homePrice = parseFloat(document.getElementById("homePrice").value);
var downPaymentPercent = parseFloat(document.getElementById("downPaymentPercent").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var assetValue = parseFloat(document.getElementById("assetValue").value);
var leverageRatio = parseFloat(document.getElementById("leverageRatio").value);
var monthlyPaymentResultElement = document.getElementById("monthlyPaymentResult");
// Input validation
if (isNaN(homePrice) || homePrice <= 0) {
alert("Please enter a valid Home Purchase Price.");
return;
}
if (isNaN(downPaymentPercent) || downPaymentPercent 100) {
alert("Please enter a valid Initial Down Payment percentage between 0 and 100.");
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please enter a valid Loan Term in years.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
alert("Please enter a valid Annual Interest Rate.");
return;
}
if (isNaN(assetValue) || assetValue < 0) {
alert("Please enter a valid Total Value of Assets.");
return;
}
if (isNaN(leverageRatio) || leverageRatio 1) {
alert("Please select a valid Asset Leverage Ratio.");
return;
}
var initialDownPaymentAmount = homePrice * (downPaymentPercent / 100);
var additionalDownPaymentFromAssets = assetValue * leverageRatio;
var totalDownPayment = initialDownPaymentAmount + additionalDownPaymentFromAssets;
// Ensure total down payment doesn't exceed home price
if (totalDownPayment > homePrice) {
totalDownPayment = homePrice;
}
var loanAmount = homePrice – totalDownPayment;
// Prevent negative loan amounts or zero loan amounts leading to division by zero
if (loanAmount <= 0) {
monthlyPaymentResultElement.textContent = "$0.00";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = 0;
// Check if interest rate is zero to avoid division by zero in the standard formula
if (monthlyInterestRate === 0) {
monthlyPayment = loanAmount / numberOfPayments;
} else {
var numerator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
monthlyPayment = loanAmount * (numerator / denominator);
}
// Format the result to two decimal places
monthlyPaymentResultElement.textContent = "$" + monthlyPayment.toFixed(2);
}