.calculator-container {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
background-color: #f9f9f9;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(auto-fit, minmax(250px, 1fr));
gap: 15px;
margin-bottom: 20px;
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 5px;
font-weight: bold;
}
.input-group input {
padding: 8px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1em;
}
button {
padding: 10px 15px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 1.1em;
margin-top: 10px;
width: 100%;
}
button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
border: 1px solid #d4edda;
background-color: #d4edda;
color: #155724;
border-radius: 4px;
font-size: 1.1em;
text-align: center;
}
function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var estimatedPropertyTax = parseFloat(document.getElementById("estimatedPropertyTax").value);
var estimatedHomeownersInsurance = parseFloat(document.getElementById("estimatedHomeownersInsurance").value);
var currentDebtPayments = parseFloat(document.getElementById("currentDebtPayments").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) || annualIncome <= 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(estimatedPropertyTax) || estimatedPropertyTax < 0 ||
isNaN(estimatedHomeownersInsurance) || estimatedHomeownersInsurance < 0 ||
isNaN(currentDebtPayments) || currentDebtPayments < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTerm) || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Typical lender ratios:
// Front-end ratio (housing costs): usually 28% of gross monthly income
// Back-end ratio (total debt): usually 36% of gross monthly income
// These are guidelines and can vary. We'll use a common conservative guideline.
var grossMonthlyIncome = annualIncome / 12;
var maxHousingPayment = grossMonthlyIncome * 0.28; // 28% for PITI
var maxTotalDebtPayment = grossMonthlyIncome * 0.36; // 36% for PITI + other debts
var maxMonthlyMortgagePayment = maxTotalDebtPayment – currentDebtPayments;
// PITI = Principal, Interest, Taxes, Insurance
// We need to estimate the maximum Principal & Interest (P&I) payment based on maxHousingPayment
// P&I = maxHousingPayment – monthlyTaxes – monthlyInsurance
var monthlyPropertyTax = estimatedPropertyTax / 12;
var monthlyHomeownersInsurance = estimatedHomeownersInsurance / 12;
var maxMonthlyPI = maxHousingPayment – monthlyPropertyTax – monthlyHomeownersInsurance;
// Ensure maxMonthlyPI is not negative
if (maxMonthlyPI 0) {
maxLoanAmount = maxMonthlyPI * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else { // Handle 0% interest rate case (though unlikely for mortgages)
maxLoanAmount = maxMonthlyPI * numberOfPayments;
}
// The maximum affordable home price is the maximum loan amount plus the down payment.
var maxAffordablePrice = maxLoanAmount + downPayment;
// Calculate the P&I for the maximum affordable price to show what the P&I would be
// This is to provide context and show that the calculated maxLoanAmount leads to an affordable P&I
var loanAmountForMaxPrice = maxAffordablePrice – downPayment;
var monthlyPAndIForMaxPrice = 0;
if (monthlyInterestRate > 0) {
monthlyPAndIForMaxPrice = loanAmountForMaxPrice * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
monthlyPAndIForMaxPrice = loanAmountForMaxPrice / numberOfPayments;
}
var totalMonthlyHousingCost = monthlyPAndIForMaxPrice + monthlyPropertyTax + monthlyHomeownersInsurance;
var totalMonthlyDebtObligations = currentDebtPayments + monthlyPAndIForMaxPrice + monthlyPropertyTax + monthlyHomeownersInsurance;
resultDiv.innerHTML =
"
Estimated Affordability:
" +
"Maximum Loan Amount You Might Qualify For: $" + maxLoanAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Estimated Maximum Affordable Home Price: $" + maxAffordablePrice.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Estimated Monthly Principal & Interest (P&I): $" + monthlyPAndIForMaxPrice.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Estimated Total Monthly Housing Payment (PITI): $" + totalMonthlyHousingCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Estimated Total Monthly Debt Obligations (incl. PITI): $" + totalMonthlyDebtObligations.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Disclaimer: This is an estimate based on common lending ratios (typically 28% front-end, 36% back-end). Actual loan approval and amounts depend on lender's specific criteria, credit score, employment history, and other factors.";
}
Understanding Mortgage Affordability
Buying a home is a significant financial decision, and understanding how much you can realistically afford is the first crucial step. Mortgage affordability calculators help prospective buyers estimate their borrowing capacity by considering various financial factors. This calculator takes into account your income, debts, and estimated homeownership costs to provide an estimate of the maximum home price you might be able to afford.
Key Factors in Mortgage Affordability:
* Annual Household Income: This is the primary driver of your borrowing power. Lenders look at your stable, verifiable income to determine your ability to make monthly payments. The higher your income, the larger the loan you can typically qualify for.
* Down Payment: The amount of money you put down upfront affects both your loan amount and your loan-to-value (LTV) ratio. A larger down payment reduces the loan amount needed, potentially leading to a lower monthly payment and a more favorable interest rate. It also plays a role in avoiding Private Mortgage Insurance (PMI) on conventional loans if you put down 20% or more.
* Estimated Property Tax: Property taxes are an annual cost of homeownership that is usually paid monthly as part of your mortgage payment (escrowed by the lender). They vary significantly by location.
* Estimated Homeowners Insurance: This insurance protects against damage to your home and is also typically paid monthly through escrow. The cost depends on the home's value, location, and coverage.
* Current Monthly Debt Payments: Lenders assess your Debt-to-Income (DTI) ratio, which compares your total monthly debt obligations to your gross monthly income. This includes car loans, student loans, credit card payments, and any other recurring debt. High DTI ratios can limit your borrowing capacity.
* Mortgage Interest Rate: Even small changes in the interest rate can have a significant impact on your monthly payment and the total interest paid over the life of the loan. Lower rates mean a lower monthly payment for the same loan amount.
* Mortgage Loan Term: This is the length of time you have to repay the loan, most commonly 15 or 30 years. Longer terms result in lower monthly payments but more interest paid overall, while shorter terms have higher monthly payments but less interest paid over time.
How the Calculator Works:
This calculator uses common lending guidelines to estimate affordability. Lenders typically look at two main DTI ratios:
1. Front-End DTI (Housing Ratio): This ratio compares your estimated total monthly housing costs (Principal, Interest, Taxes, and Insurance – often called PITI) to your gross monthly income. A common guideline is that PITI should not exceed 28% of your gross monthly income.
2. Back-End DTI (Total Debt Ratio): This ratio compares all your monthly debt obligations (including PITI, credit cards, car loans, student loans, etc.) to your gross monthly income. A common guideline is that total debt should not exceed 36% of your gross monthly income.
The calculator first determines your gross monthly income. Then, it applies these DTI ratios to estimate the maximum monthly housing payment and the maximum total monthly debt payment you can afford. By subtracting your estimated taxes, insurance, and current debt payments from these maximums, it calculates the maximum monthly Principal & Interest (P&I) payment you can handle. Finally, using the loan term and interest rate, it works backward to estimate the maximum loan amount you can borrow and, consequently, the maximum home price you might afford with your given down payment.
Important Disclaimer:
The results from this calculator are for **estimation purposes only**. They are based on general lending practices and do not constitute a loan commitment. Actual mortgage approval and the loan amount you qualify for will depend on a lender's specific underwriting criteria, your credit score, employment history, the property's appraisal, and other individual financial factors. It is always recommended to speak with a mortgage professional to get a pre-approval and a more accurate understanding of your borrowing capacity.