.calculator-wrapper {
font-family: sans-serif;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
max-width: 500px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-wrapper h2 {
text-align: center;
margin-bottom: 20px;
color: #333;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(auto-fit, minmax(200px, 1fr));
gap: 15px;
margin-bottom: 20px;
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 5px;
font-weight: bold;
color: #555;
}
.input-group input {
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 16px;
}
.calculator-wrapper button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease;
margin-top: 10px;
}
.calculator-wrapper button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 25px;
padding: 15px;
border: 1px dashed #007bff;
border-radius: 4px;
background-color: #e7f3ff;
text-align: center;
font-size: 18px;
color: #0056b3;
font-weight: bold;
}
function calculateMortgageAffordability() {
var income = parseFloat(document.getElementById("income").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var otherDebts = parseFloat(document.getElementById("otherDebts").value);
var resultDiv = document.getElementById("result");
if (isNaN(income) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(otherDebts) ||
income <= 0 || downPayment < 0 || interestRate < 0 || loanTerm <= 0 || otherDebts < 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Rule of thumb: Lenders typically allow a Debt-to-Income (DTI) ratio of up to 43%.
// This includes your potential mortgage payment AND other monthly debts.
// We'll also consider a common guideline that housing costs (PITI) shouldn't exceed 28% of gross monthly income.
var grossMonthlyIncome = income / 12;
// Max monthly housing payment (principal, interest, taxes, insurance – PITI)
// Using the 28% rule as a conservative starting point for housing costs.
var maxMonthlyHousingPayment = grossMonthlyIncome * 0.28;
// Calculate maximum total monthly debt allowed (including housing)
// Using the 43% DTI rule
var maxTotalMonthlyDebt = grossMonthlyIncome * 0.43;
// Maximum affordable monthly mortgage payment (P&I only, after taxes/insurance)
// This is a simplified estimation. Actual PITI will be higher.
var maxAffordablePIMortgagePayment = maxTotalMonthlyDebt – otherDebts;
if (maxAffordablePIMortgagePayment 0 && numberOfPayments > 0) {
var numerator = monthlyInterestRate * Math.pow((1 + monthlyInterestRate), numberOfPayments);
var denominator = Math.pow((1 + monthlyInterestRate), numberOfPayments) – 1;
if (denominator > 0) {
loanAmount = effectiveMaxMonthlyMortgagePayment * (denominator / numerator);
}
} else if (monthlyInterestRate === 0 && numberOfPayments > 0) { // Handle 0% interest rate case
loanAmount = effectiveMaxMonthlyMortgagePayment * numberOfPayments;
}
// The calculated loanAmount is what you can borrow.
// The maximum home price you can afford is the loan amount + your down payment.
var maxHomePrice = loanAmount + downPayment;
resultDiv.innerHTML = "Estimated Maximum Home Price You Can Afford: $" + maxHomePrice.toFixed(2) +
"Estimated Maximum Loan Amount: $" + loanAmount.toFixed(2) +
"(This is an estimate based on common DTI and housing expense ratios. Actual lender approval depends on many factors.)";
}
Understanding Mortgage Affordability
Buying a home is one of the biggest financial decisions you'll make. Understanding how much you can realistically afford is the crucial first step. Mortgage affordability isn't just about how much you *want* to spend, but how much lenders are willing to lend you, and more importantly, how much you can comfortably repay each month without straining your finances.
Key Factors Influencing Affordability
Income: Your gross annual household income is the primary driver. Lenders assess your ability to repay based on your earnings.
Down Payment: A larger down payment reduces the loan amount needed, lowers your monthly payments, and can help you avoid Private Mortgage Insurance (PMI) on conventional loans if it's 20% or more.
Interest Rate: Even small changes in interest rates can significantly impact your monthly payments and the total interest paid over the life of the loan. Higher rates mean higher payments for the same loan amount.
Loan Term: The length of the mortgage (e.g., 15, 20, 30 years). Shorter terms have higher monthly payments but less total interest paid. Longer terms have lower monthly payments but more total interest over time.
Existing Debts: Lenders look at your Debt-to-Income (DTI) ratio. This is the percentage of your gross monthly income that goes towards paying your monthly debt obligations, including credit cards, car loans, student loans, and the potential new mortgage payment.
Other Housing Costs: Beyond the principal and interest (P&I) of your mortgage, you'll have property taxes, homeowner's insurance, and potentially HOA fees (often referred to as PITI). Lenders factor these into their affordability calculations.
How Lenders Assess Affordability (The 28/43 Rule)
A common guideline lenders use is the "28/43 rule":
28% Rule: Your total monthly housing costs (Principal, Interest, Taxes, Insurance – PITI) should ideally not exceed 28% of your gross monthly income.
43% Rule: Your total monthly debt obligations (including PITI and all other recurring debts like car payments, student loans, and credit card minimums) should not exceed 43% of your gross monthly income.
Our calculator uses these principles to provide an estimated maximum home price. It calculates the maximum monthly payment you might qualify for based on these DTI ratios and then works backward to determine the loan amount you could support, finally adding your down payment.
Using the Calculator
Enter your estimated annual household income, the amount you plan to put down, the current estimated mortgage interest rate, your desired loan term in years, and the total of your other monthly debt payments. The calculator will then provide an estimate of the maximum home price you might be able to afford.
Important Considerations
This is an estimate: Lender approval depends on many factors, including your credit score, employment history, lender-specific guidelines, and the specific loan product.
PITI vs. P&I: Our calculator estimates your affordable loan principal and interest (P&I) based on DTI, but remember that your actual monthly housing payment will include taxes and insurance, which can increase your total cost.
Comfort Level: Don't just buy the most expensive house you qualify for. Consider your lifestyle, savings goals, and future financial plans to ensure your mortgage payment is truly affordable for *you*.
Use this calculator as a starting point for your home-buying journey. It's always recommended to speak with a mortgage professional for personalized advice and pre-approval.