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(auto-fit, minmax(250px, 1fr));
gap: 15px;
margin-bottom: 20px;
}
.form-group {
display: flex;
flex-direction: column;
}
label {
margin-bottom: 5px;
font-weight: bold;
color: #333;
}
input[type="number"] {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1em;
}
button {
background-color: #007bff;
color: white;
padding: 12px 20px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 1.1em;
transition: background-color 0.3s ease;
grid-column: 1 / -1; /* Span across all columns if in a grid */
}
button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
background-color: #e9ecef;
border: 1px solid #dee2e6;
border-radius: 4px;
font-size: 1.1em;
text-align: center;
color: #495057;
}
.calculator-result strong {
color: #28a745;
}
function calculateAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(annualIncome) || annualIncome <= 0 ||
isNaN(monthlyDebt) || monthlyDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(annualInterestRate) || annualInterestRate <= 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Rule of thumb: Lenders often use the 28/36 rule.
// Front-end ratio (PITI – Principal, Interest, Taxes, Insurance) should not exceed 28% of gross monthly income.
// Back-end ratio (PITI + other debts) should not exceed 36% of gross monthly income.
var grossMonthlyIncome = annualIncome / 12;
// Maximum monthly housing payment (including PITI) based on 28% rule
var maxMonthlyHousingPayment = grossMonthlyIncome * 0.28;
// Maximum total monthly debt payments (including PITI) based on 36% rule
var maxTotalMonthlyDebt = grossMonthlyIncome * 0.36;
// Maximum affordable PITI based on back-end ratio
var maxPitiBasedOnDebt = maxTotalMonthlyDebt – monthlyDebt;
// The more restrictive of the two limits for PITI
var affordablePiti = Math.min(maxMonthlyHousingPayment, maxPitiBasedOnDebt);
if (affordablePiti 0) {
maxLoanAmount = affordablePiti * (1 – Math.pow(1 + monthlyInterestRate, -loanTermMonths)) / monthlyInterestRate;
} else {
// Handle case of 0% interest (though unlikely for mortgages)
maxLoanAmount = affordablePiti * loanTermMonths;
}
// Maximum home price is loan amount + down payment
var maxHomePrice = maxLoanAmount + downPayment;
// Display results
var formattedMaxHomePrice = maxHomePrice.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMonthlyPiti = affordablePiti.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = "Based on your inputs:" +
"Your estimated maximum affordable PITI (Principal, Interest, Taxes, Insurance) is:
" + formattedMonthlyPiti + " per month." +
"Your estimated maximum loan amount is:
" + formattedMaxLoanAmount + "." +
"Considering your down payment, the estimated maximum home price you could afford is:
" + formattedMaxHomePrice + ".";
}
Understanding Mortgage Affordability
Buying a home is one of the most significant financial decisions you'll make. Understanding how much you can realistically afford for a mortgage is crucial before you start house hunting. This involves looking beyond just the sticker price of a home and considering your income, existing debts, and the various costs associated with homeownership.
The 28/36 Rule: A Common Guideline
Lenders commonly use the "28/36 rule" as a primary guideline for determining mortgage affordability. This rule has two parts:
- The 28% Rule (Front-End Ratio): Your total monthly housing expenses, often referred to as PITI (Principal, Interest, Taxes, and Insurance), should not exceed 28% of your gross monthly income.
- The 36% Rule (Back-End Ratio): Your total monthly debt obligations, including your PITI payment plus all other recurring debts (like car loans, student loans, and credit card minimum payments), should not exceed 36% of your gross monthly income.
While these are common benchmarks, lenders may be flexible. Factors like a higher credit score, a larger down payment, or stable employment history can sometimes allow for higher ratios, while other factors might necessitate stricter adherence.
Key Components of the Calculation:
- Annual Household Income: This is your total income before taxes. For a combined household, include all relevant incomes.
- Monthly Debt Payments: This includes minimum payments on credit cards, auto loans, student loans, personal loans, and any other recurring debts, excluding your potential mortgage payment.
- Down Payment: The upfront cash you contribute towards the purchase price of the home. A larger down payment reduces the loan amount needed and can sometimes influence lender approval.
- Interest Rate: The annual interest rate on the mortgage loan. This significantly impacts your monthly payment.
- Loan Term: The duration of the mortgage, typically 15 or 30 years. A shorter term means higher monthly payments but less total interest paid over time.
How the Calculator Works:
This calculator estimates your maximum affordable home price by:
- Calculating your gross monthly income.
- Determining the maximum monthly housing payment (PITI) allowed by the 28% rule.
- Calculating the maximum total monthly debt allowed by the 36% rule and subtracting your existing monthly debts to find the maximum PITI you can afford.
- Taking the lower of these two PITI amounts as your affordable monthly housing expense.
- Using a standard mortgage payment formula, it calculates the maximum loan amount you can support with that affordable PITI, given your desired interest rate and loan term.
- Finally, it adds your down payment to this maximum loan amount to estimate the maximum home price you can afford.
Disclaimer: This calculator provides an estimate for informational purposes only. It does not constitute a loan approval or a guarantee of financing. Your actual borrowing capacity may differ based on lender-specific underwriting criteria, credit history, property appraisal, and other factors.