.calculator-container {
font-family: Arial, sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ddd;
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;
}
.calculator-inputs {
display: grid;
grid-template-columns: 1fr 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 #ccc;
border-radius: 4px;
font-size: 16px;
}
.calculator-container button {
display: block;
width: 100%;
padding: 12px;
background-color: #007bff;
color: white;
border: none;
border-radius: 5px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
border: 1px solid #eee;
border-radius: 5px;
background-color: #f9f9f9;
text-align: center;
font-size: 18px;
color: #333;
}
.calculator-result h3 {
margin-top: 0;
color: #007bff;
}
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 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(interestRate) || interestRate <= 0 ||
isNaN(loanTerm) || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Lenders often use the 28/36 rule.
// Rule 1: Housing expenses (PITI) should not exceed 28% of gross monthly income.
// Rule 2: Total debt obligations (including PITI) should not exceed 36% of gross monthly income.
var grossMonthlyIncome = annualIncome / 12;
// Calculate maximum housing payment based on the 28% rule
var maxHousingPayment28 = grossMonthlyIncome * 0.28;
// Calculate maximum total debt payment based on the 36% rule
var maxTotalDebt36 = grossMonthlyIncome * 0.36;
// Calculate the maximum affordable monthly mortgage payment (Principal & Interest only for now)
// We subtract existing debts from the 36% limit to find the maximum P&I payment allowed.
var maxMonthlyMortgagePayment = maxTotalDebt36 – monthlyDebt;
// The actual affordable mortgage payment is limited by the stricter of the two rules.
// Since the 36% rule already incorporates other debts, we use the result from that.
// However, if maxMonthlyMortgagePayment calculated from 36% rule is negative,
// it means even without a mortgage, debt exceeds the limit, so affordability is 0.
if (maxMonthlyMortgagePayment 0 && numberOfPayments > 0) {
var mortgageFactor = (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) /
(Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
if (mortgageFactor > 0) {
affordableLoanAmount = maxMonthlyMortgagePayment / mortgageFactor;
}
}
// The maximum home price you can afford is the affordable loan amount plus your down payment.
var maxHomePrice = affordableLoanAmount + downPayment;
// Display results
var formattedMaxHomePrice = maxHomePrice.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMaxMonthlyMortgagePayment = maxMonthlyMortgagePayment.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedGrossMonthlyIncome = grossMonthlyIncome.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMaxTotalDebt36 = maxTotalDebt36.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = `
Estimated Mortgage Affordability
Estimated Maximum Home Price: ${formattedMaxHomePrice}
Estimated Maximum Monthly P&I Payment: ${formattedMaxMonthlyMortgagePayment}
Based on your annual income of ${formattedGrossMonthlyIncome} and total monthly debts of ${monthlyDebt.toLocaleString('en-US', { style: 'currency', currency: 'USD' })}.
This estimate uses a simplified 28/36 rule and does not include property taxes, homeowners insurance, or PMI (Private Mortgage Insurance), which would increase your actual monthly housing cost (PITI).
`;
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the home-buying process. Lenders use various metrics to assess your ability to repay a mortgage, with the most common being the 28/36 rule.
The 28/36 Rule Explained
This rule of thumb helps lenders gauge your financial capacity for a mortgage:
The 28% Rule (Front-End Ratio): This states that your total monthly housing expenses – including principal, interest, property taxes, homeowners insurance (often referred to as PITI), and potentially private mortgage insurance (PMI) – should not exceed 28% of your gross monthly income.
The 36% Rule (Back-End Ratio): This rule is more comprehensive. It suggests that your total monthly debt obligations, which include your potential mortgage payment (PITI) PLUS all other recurring monthly debts (like car loans, student loans, credit card minimum payments, and personal loans), should not exceed 36% of your gross monthly income.
How This Calculator Works
This Mortgage Affordability Calculator uses a simplified version of the 28/36 rule to provide an estimate of how much house you might be able to afford. It focuses on your gross monthly income and your existing monthly debt payments.
The calculator first determines the maximum monthly debt payment you can handle based on the 36% rule. It then subtracts your existing monthly debt payments from this maximum to find out how much you can potentially afford for a Principal and Interest (P&I) mortgage payment. Finally, using the provided interest rate and loan term, it calculates the maximum loan amount you can take out to meet that P&I payment. Your estimated maximum home price is this loan amount plus the down payment you enter.
Important Considerations
Gross Monthly Income: This is your income before taxes and other deductions.
Existing Monthly Debt Payments: Include all recurring monthly payments like car loans, student loans, credit card minimums, and personal loans. Do NOT include utilities or rent.
Down Payment: The amount of money you pay upfront. A larger down payment reduces the loan amount needed.
Interest Rate & Loan Term: These significantly impact your monthly payment and the total interest paid over the life of the loan.
PITI: This calculator provides an estimate for the Principal and Interest (P&I) portion of your mortgage payment. Your actual housing payment will be higher once property taxes, homeowners insurance, and potentially PMI are included. Lenders will factor these into their final affordability assessment.
Credit Score: Your creditworthiness plays a vital role in mortgage approval and the interest rate you qualify for.
Lender Specifics: This is an estimation tool. Individual lenders may have different qualification criteria, debt-to-income ratio limits, and other requirements.
Always consult with a mortgage lender or financial advisor for personalized advice and precise affordability figures.