.calculator-container {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
box-shadow: 0 2px 4px rgba(0,0,0,0.1);
}
.calculator-container h2 {
text-align: center;
margin-bottom: 20px;
color: #333;
}
.input-group {
margin-bottom: 15px;
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 5px;
font-weight: bold;
color: #555;
}
.input-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1rem;
}
button {
display: block;
width: 100%;
padding: 12px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 1.1rem;
cursor: pointer;
transition: background-color 0.3s ease;
margin-top: 10px;
}
button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
background-color: #e9ecef;
border: 1px solid #ddd;
border-radius: 4px;
text-align: center;
font-size: 1.1rem;
color: #333;
}
.calculator-result span {
font-weight: bold;
color: #28a745;
}
function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebtPayments = parseFloat(document.getElementById("monthlyDebtPayments").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value) / 100;
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var propertyTaxesAnnual = parseFloat(document.getElementById("propertyTaxesAnnual").value);
var homeownersInsuranceAnnual = parseFloat(document.getElementById("homeownersInsuranceAnnual").value);
var pmiPercentage = parseFloat(document.getElementById("pmiPercentage").value) / 100;
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebtPayments) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTermYears) || isNaN(propertyTaxesAnnual) || isNaN(homeownersInsuranceAnnual) || isNaN(pmiPercentage)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
// Lender Debt-to-Income (DTI) Ratios – common guidelines
var frontEndDTIMax = 0.28; // Housing expenses (PITI) / Gross Monthly Income
var backEndDTIMax = 0.36; // Total monthly debt payments (including PITI) / Gross Monthly Income
var grossMonthlyIncome = annualIncome / 12;
var maxHousingPayment = grossMonthlyIncome * frontEndDTIMax;
var totalMonthlyObligationsMax = grossMonthlyIncome * backEndDTIMax;
// Estimate maximum total monthly mortgage payment (PITI)
// We'll work backwards from the DTI limits to find the maximum affordable PITI.
// The back-end DTI limit is usually the more restrictive one.
var maxPiti = totalMonthlyObligationsMax – monthlyDebtPayments;
// Ensure maxPITI doesn't exceed what's allowed by the front-end DTI if that's more restrictive
if (maxPiti > maxHousingPayment) {
maxPiti = maxHousingPayment;
}
// If maxPiti is negative or zero, affordability is very low.
if (maxPiti <= 0) {
resultDiv.innerHTML = "Based on your income and debts, your affordable monthly housing payment is very limited or zero. It may not be possible to qualify for a mortgage at this time.";
return;
}
// Calculate monthly PITI components (excluding principal and interest initially)
var monthlyPropertyTaxes = propertyTaxesAnnual / 12;
var monthlyHomeownersInsurance = homeownersInsuranceAnnual / 12;
var monthlyPmi = (annualIncome * pmiPercentage) / 12; // PMI is often based on loan amount, but using income as a proxy for simplicity here. A more precise calculation would be needed for actual qualification.
// Monthly Interest and Principal (P&I) estimate
// maxPiti = P&I + Taxes + Insurance + PMI
var maxPrincipalInterestPayment = maxPiti – monthlyPropertyTaxes – monthlyHomeownersInsurance – monthlyPmi;
if (maxPrincipalInterestPayment 0) {
// Mortgage payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where: M = monthly payment, P = principal loan amount, i = monthly interest rate, n = number of months
// Rearranging to solve for P: P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ]
var numerator = Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths);
maxLoanAmount = maxPrincipalInterestPayment * (numerator / denominator);
} else {
// If interest rate is 0%, max loan is simply monthly payment * number of months
maxLoanAmount = maxPrincipalInterestPayment * loanTermMonths;
}
// Calculate maximum affordable home price
var maxHomePrice = maxLoanAmount + downPayment;
// Format results for display
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMaxHomePrice = maxHomePrice.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMaxPiti = maxPiti.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = "Based on your inputs, your estimated maximum affordable monthly housing payment (PITI) is " + formattedMaxPiti + "." +
"This suggests you may be able to borrow approximately " + formattedMaxLoanAmount + "." +
"Therefore, the estimated maximum home price you could afford, including your down payment, is " + formattedMaxHomePrice + ".";
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the home-buying process. Lenders use various factors to assess your ability to repay a mortgage loan, primarily focusing on your income, existing debts, and the potential costs associated with homeownership. This mortgage affordability calculator helps you estimate your borrowing capacity based on common lending guidelines.
Key Factors Influencing Affordability:
Annual Gross Income: This is your total income before taxes and deductions. Lenders use this to determine your ability to handle monthly payments.
Monthly Debt Payments: This includes all your recurring monthly debt obligations, such as car loans, student loans, and credit card minimum payments. It excludes your potential mortgage payment.
Down Payment: The amount of cash you put towards the purchase price of the home. A larger down payment reduces the loan amount needed and can improve your borrowing terms.
Interest Rate: The annual interest rate on the mortgage. Higher interest rates mean higher monthly payments for the same loan amount.
Loan Term: The length of the mortgage, typically 15 or 30 years. Longer terms usually result in lower monthly payments but more interest paid over the life of the loan.
Property Taxes: Annual taxes assessed by local governments on your property. These are paid monthly as part of your total housing payment (PITI).
Homeowners Insurance: Insurance that protects your home against damage or loss. This is also paid monthly as part of PITI.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's purchase price, lenders typically require PMI to protect themselves against default. This adds to your monthly payment.
How Lenders Assess Affordability: Debt-to-Income Ratios (DTI)
Lenders commonly use two main Debt-to-Income (DTI) ratios to gauge your financial health:
Front-End DTI (Housing Ratio): This ratio compares your estimated total monthly housing expenses (Principal, Interest, Taxes, Insurance – PITI) to your gross monthly income. A common guideline is that PITI should not exceed 28% of your gross monthly income.
Back-End DTI (Total Debt Ratio): This ratio compares all your monthly debt obligations (including the estimated PITI) to your gross monthly income. A common guideline is that total monthly debt payments should not exceed 36% of your gross monthly income.
Lenders typically qualify borrowers based on whichever DTI ratio is more restrictive. Our calculator estimates affordability using these common DTI thresholds.
Using the Calculator
Enter your financial details into the fields above. The calculator will provide an estimate of your maximum affordable monthly housing payment (PITI) and an estimated maximum home price you could afford. Remember, this is an estimate, and actual loan approval depends on the lender's specific underwriting criteria, your credit score, employment history, and other financial factors.
PMI: 0.5% (since the down payment is less than 20%)
Based on these inputs, the calculator might suggest an affordable monthly housing payment and an estimated maximum home price. This allows you to set a realistic budget before you start house hunting.