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Mortgage Affordability Calculator
Use this calculator to estimate the maximum mortgage you can afford and understand the key factors that influence this amount. This will help you in your home-buying journey.
function calculateMortgageAffordability() {
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 propertyTaxes = parseFloat(document.getElementById("propertyTaxes").value);
var homeInsurance = parseFloat(document.getElementById("homeInsurance").value);
var pmi = parseFloat(document.getElementById("pmi").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// — Input Validation —
if (isNaN(annualIncome) || annualIncome <= 0) {
resultDiv.innerHTML = "Please enter a valid Annual Income.";
return;
}
if (isNaN(monthlyDebt) || monthlyDebt < 0) {
resultDiv.innerHTML = "Please enter a valid Monthly Debt Payments.";
return;
}
if (isNaN(downPayment) || downPayment < 0) {
resultDiv.innerHTML = "Please enter a valid Down Payment.";
return;
}
if (isNaN(interestRate) || interestRate 20) { // Assuming a reasonable max interest rate
resultDiv.innerHTML = "Please enter a valid Estimated Interest Rate between 0 and 20.";
return;
}
if (isNaN(loanTerm) || loanTerm 50) { // Assuming a reasonable max loan term
resultDiv.innerHTML = "Please enter a valid Loan Term between 0 and 50 years.";
return;
}
if (isNaN(propertyTaxes) || propertyTaxes < 0) {
resultDiv.innerHTML = "Please enter a valid Estimated Annual Property Taxes.";
return;
}
if (isNaN(homeInsurance) || homeInsurance < 0) {
resultDiv.innerHTML = "Please enter a valid Estimated Annual Homeowner's Insurance.";
return;
}
if (isNaN(pmi) || pmi < 0) {
resultDiv.innerHTML = "Please enter a valid Estimated Annual PMI.";
return;
}
// — Calculation Logic —
// Lender typically uses Debt-to-Income (DTI) ratios. Common limits are 28% for front-end (housing) and 36% for back-end (all debts).
// We'll use a conservative combined DTI, often around 43-45% for a more realistic estimate of affordability for many lenders.
// Let's assume a target of 43% for total debt payments.
var maxTotalDebtPayment = annualIncome * 0.43;
var maxMortgagePayment = maxTotalDebtPayment – (monthlyDebt * 12); // Subtract annual debt payments
if (maxMortgagePayment 0) {
estimatedMaxLoanAmount = maxMortgagePayment * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else { // Handle 0% interest rate scenario, though unlikely for mortgages
estimatedMaxLoanAmount = maxMortgagePayment * numberOfPayments;
}
// Adjust for property taxes, homeowner's insurance, and PMI (these are part of the PITI payment, which is often capped by the front-end DTI)
// We need to ensure the calculated PITI is within the 28% front-end DTI if using that model, or that the total monthly cost (PITI) fits within affordability.
// A simpler approach for affordability is to ensure the total monthly housing cost (including PITI) doesn't exceed a reasonable percentage of income.
// Often, lenders consider the front-end ratio (Principal, Interest, Taxes, Insurance – PITI) as a major factor, typically around 28-30% of gross monthly income.
var monthlyGrossIncome = annualIncome / 12;
var maxPitiPayment = monthlyGrossIncome * 0.28; // Assuming a 28% front-end DTI
// Now, we need to find the loan amount where PITI <= maxPitiPayment.
// PITI = Principal & Interest (P&I) + Taxes + Insurance + PMI
// P&I = maxPitiPayment – Taxes – Insurance – PMI
var monthlyPropertyTaxes = propertyTaxes / 12;
var monthlyHomeInsurance = homeInsurance / 12;
var monthlyPmi = pmi / 12;
var maxPiPayment = maxPitiPayment – monthlyPropertyTaxes – monthlyHomeInsurance – monthlyPmi;
if (maxPiPayment 0) {
maximumAffordableLoan = maxPiPayment * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else {
maximumAffordableLoan = maxPiPayment * numberOfPayments;
}
// The maximum loan you can get is the smaller of the two calculations (back-end DTI vs front-end DTI)
var finalMaxLoanAmount = Math.min(estimatedMaxLoanAmount, maximumAffordableLoan);
// Calculate the maximum home price
var maximumAffordableHomePrice = finalMaxLoanAmount + downPayment;
// Format results
var formattedMaxLoan = finalMaxLoanAmount.toLocaleString('en-US', { style: 'currency', currency: 'USD', minimumFractionDigits: 0, maximumFractionDigits: 0 });
var formattedMaxHomePrice = maximumAffordableHomePrice.toLocaleString('en-US', { style: 'currency', currency: 'USD', minimumFractionDigits: 0, maximumFractionDigits: 0 });
var formattedMaxPiti = maxPitiPayment.toLocaleString('en-US', { style: 'currency', currency: 'USD', minimumFractionDigits: 2, maximumFractionDigits: 2 });
resultDiv.innerHTML =
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