.calculator-container {
font-family: Arial, sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 600px;
margin: 20px auto;
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;
color: #333;
}
.input-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1rem;
}
.calculator-container button {
background-color: #4CAF50;
color: white;
padding: 12px 20px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 1.1rem;
width: 100%;
margin-top: 10px;
}
.calculator-container button:hover {
background-color: #45a049;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
border: 1px dashed #4CAF50;
border-radius: 4px;
background-color: #e8f5e9;
text-align: center;
font-size: 1.1rem;
color: #333;
}
.calculator-result strong {
color: #4CAF50;
}
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 pmiPercentage = parseFloat(document.getElementById("pmiPercentage").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 ||
isNaN(propertyTaxes) || propertyTaxes < 0 ||
isNaN(homeInsurance) || homeInsurance < 0 ||
isNaN(pmiPercentage) || pmiPercentage < 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// — Calculations —
// 1. Calculate Maximum Monthly Payment based on Debt-to-Income (DTI) ratios
// Common guidelines suggest housing expenses (PITI) shouldn't exceed 28% of gross monthly income,
// and total debt (including PITI) shouldn't exceed 36% of gross monthly income.
// We'll use the more conservative 36% total debt ratio as the primary driver for affordability.
var grossMonthlyIncome = annualIncome / 12;
var maxTotalMonthlyPayment = grossMonthlyIncome * 0.36;
var maxMortgagePayment = maxTotalMonthlyPayment – monthlyDebt;
if (maxMortgagePayment <= 0) {
resultDiv.innerHTML = "Based on your income and existing debts, you may not qualify for a mortgage at this time.";
return;
}
// 2. Estimate Monthly Property Taxes, Home Insurance, and PMI
var monthlyPropertyTaxes = propertyTaxes / 12;
var monthlyHomeInsurance = homeInsurance / 12;
var monthlyPmi = 0;
if (pmiPercentage > 0) {
// PMI is typically calculated on the loan amount, but for affordability,
// we can use it as a percentage of the *potential* house price to get a rough estimate.
// A more accurate calculation would involve iterating or a separate loan amount input.
// For simplicity, let's estimate PMI based on a fraction of the max monthly payment,
// or use a common assumption that it might be around 0.5% to 1% of the loan annually.
// A simpler approach for affordability is to estimate it relative to the loan.
// Let's assume a loan value to estimate PMI for now.
// This is an approximation for affordability estimation.
// A more precise calculator would require loan amount.
// For this affordability calculator, we'll need to work backwards.
// Let's make an assumption: PMI is usually a % of the loan, often around 0.5-1% annually.
// For affordability, we can't know the loan amount yet.
// A common rule of thumb is that PMI is often around 0.5% to 1% of the loan value annually.
// Let's approximate it as a percentage of the monthly housing payment, for simplicity in this affordability tool.
// This is a simplification. A real mortgage calculator would need the loan amount.
// Let's assume PMI is roughly 0.75% of the loan value annually.
// For affordability, we're estimating the *maximum possible loan*.
// A better way for affordability is to factor it into the PITI calculation and solve for the loan amount.
// Let's assume PMI is a percentage of the *loan amount*. We don't have the loan amount yet.
// We can estimate the maximum *loan amount* first, then refine.
// For now, let's make a simplifying assumption for PITI:
// We'll calculate the maximum loan based on PITI, and then see if PMI fits.
}
// 3. Calculate the Maximum Principal and Interest (P&I) Payment
// P&I is what's left after taxes, insurance, and PMI from the max total payment.
// We'll need to adjust this based on PMI later if it's applicable and significant.
var estimatedPiti = maxMortgagePayment; // Initial estimate including P&I, taxes, insurance
// Iterative approach or assumption to handle PMI in affordability:
// PMI is a percentage of the loan. The loan amount depends on the price minus down payment.
// Price = Loan Amount + Down Payment.
// Maximum Loan Amount is what we are trying to find.
// Let's assume PMI adds X% to the monthly payment, where X depends on the loan amount.
// This makes direct calculation difficult without knowing the loan amount.
// Simpler approach for affordability: Calculate max loan without PMI first,
// then check if PMI would push it over the limit.
// A common way to estimate PMI for affordability: it's often 0.5% – 1% of the loan amount annually.
// For affordability, let's estimate the maximum loan amount first, then calculate PMI on *that* loan amount,
// and see if the required P&I + Taxes + Insurance + PMI is less than maxMortgagePayment.
var monthlyInterestRate = interestRate / 100 / 12;
var numberOfMonths = loanTerm * 12;
// Estimate Maximum Loan Amount (L) using the mortgage payment formula, solving for L:
// M = L [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where M is the monthly P&I payment.
// L = M * [ (1 + i)^n – 1] / [ i(1 + i)^n ]
// Let's first calculate the maximum P&I portion of the maxMortgagePayment.
// We need to account for Taxes, Insurance, and PMI within the `maxMortgagePayment`.
// Max P&I = maxMortgagePayment – monthlyPropertyTaxes – monthlyHomeInsurance – estimatedMonthlyPmi
// Since estimatedMonthlyPmi depends on the loan amount, this is tricky.
// Let's iterate or make a robust assumption.
// Assume a maximum loan amount, calculate P&I, Taxes, Insurance, PMI. Check if total <= maxMortgagePayment.
// Or, work backwards from the max P&I.
// Assumption: We'll calculate the maximum loan amount assuming P&I is the *entire* maxMortgagePayment.
// Then we'll check if this loan, plus taxes, insurance, and *estimated* PMI fits.
// If not, we need to reduce the loan amount.
// Calculate max loan based on P&I = maxMortgagePayment (simplistic start)
var pniPaymentMaxEstimate = maxMortgagePayment – monthlyPropertyTaxes – monthlyHomeInsurance;
if (pniPaymentMaxEstimate <= 0) {
resultDiv.innerHTML = "Your estimated monthly housing costs (taxes & insurance) alone exceed your affordable housing payment limit.";
return;
}
var maxLoanAmount = 0;
if (monthlyInterestRate > 0) {
var numerator = Math.pow(1 + monthlyInterestRate, numberOfMonths) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfMonths);
maxLoanAmount = pniPaymentMaxEstimate * (numerator / denominator);
} else {
// Handle zero interest rate case (unlikely but for completeness)
maxLoanAmount = pniPaymentMaxEstimate * numberOfMonths;
}
// Now, let's refine with PMI.
// PMI is typically required when the Loan-to-Value (LTV) ratio is over 80%.
// LTV = Loan Amount / Property Value. Property Value = Loan Amount + Down Payment.
var maxPotentialPropertyValue = maxLoanAmount + downPayment;
var ltvRatio = maxLoanAmount / maxPotentialPropertyValue;
var estimatedMonthlyPmi = 0;
if (ltvRatio > 0.80 && pmiPercentage > 0) {
// PMI is usually calculated on the loan amount.
// A common annual PMI rate is 0.5% to 1% of the loan.
// Let's use the provided percentage (which is usually an annual rate)
var annualPmiRate = pmiPercentage / 100;
estimatedMonthlyPmi = (maxLoanAmount * annualPmiRate) / 12;
}
// Recalculate P&I needed with PMI included
var requiredPniPayment = maxMortgagePayment – monthlyPropertyTaxes – monthlyHomeInsurance – estimatedMonthlyPmi;
if (requiredPniPayment <= 0) {
resultDiv.innerHTML = "The estimated monthly costs including PMI exceed your affordable housing payment limit. Consider a larger down payment or reducing other debts.";
return;
}
// Calculate the actual maximum loan amount the required P&I can support
var actualMaxLoanAmount = 0;
if (monthlyInterestRate > 0) {
var numerator = Math.pow(1 + monthlyInterestRate, numberOfMonths) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfMonths);
actualMaxLoanAmount = requiredPniPayment * (numerator / denominator);
} else {
actualMaxLoanAmount = requiredPniPayment * numberOfMonths;
}
var affordableHousePrice = actualMaxLoanAmount + downPayment;
// — Output —
resultDiv.innerHTML = `
Your estimated maximum affordable house price: $${affordableHousePrice.toFixed(2)}
Based on:
Maximum affordable monthly PITI (Principal, Interest, Taxes, Insurance, PMI): $${maxMortgagePayment.toFixed(2)}
Estimated monthly Principal & Interest (P&I): $${requiredPniPayment.toFixed(2)}
Maximum estimated loan amount: $${actualMaxLoanAmount.toFixed(2)}
Disclaimer: This is an estimate and does not guarantee loan approval. Lender guidelines and specific loan products may vary. Consult with a mortgage professional.
`;
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the home-buying process. A mortgage affordability calculator helps estimate the maximum home price you can potentially purchase based on your financial situation. It's important to understand the factors that influence this calculation:
Key Factors in Mortgage Affordability:
Annual Household Income: This is the primary driver of your borrowing capacity. Lenders assess your income to determine your ability to repay the loan.
Monthly Debt Payments: Existing financial obligations like car loans, student loans, and credit card minimum payments reduce the amount of income available for a mortgage. These are often factored into your Debt-to-Income (DTI) ratio.
Down Payment: The amount you pay upfront significantly impacts your loan amount and potentially your interest rate and PMI requirements. A larger down payment generally means a smaller loan and lower monthly payments.
Interest Rate: Even small changes in the interest rate can have a substantial effect on your monthly payment and the total interest paid over the life of the loan.
Loan Term: Mortgages are typically offered in terms of 15, 20, or 30 years. Shorter terms mean higher monthly payments but less interest paid overall. Longer terms mean lower monthly payments but more interest paid over time.
Property Taxes: These are local government taxes assessed on the value of your property. They are paid annually but are typically included in your monthly mortgage payment (as part of PITI – Principal, Interest, Taxes, and Insurance).
Homeowner's Insurance: This insurance protects you and the lender against damage to the property. Like property taxes, it's usually 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 usually require PMI. This protects the lender in case you default on the loan. PMI costs vary but are often expressed as a percentage of the loan amount annually.
How the Calculator Works:
This calculator uses common lending guidelines to estimate your affordability. Generally, lenders look at two DTI ratios:
Front-End Ratio (Housing Ratio): The proposed monthly housing payment (PITI) should ideally not exceed 28% of your gross monthly income.
Back-End Ratio (Total Debt Ratio): Your total monthly debt obligations (including PITI) should ideally not exceed 36% of your gross monthly income.
This calculator primarily uses the 36% back-end ratio as it represents your total monthly debt burden. It first calculates your maximum total monthly debt payment allowed. Then, it subtracts your existing monthly debt payments to determine the maximum amount you can afford for your total monthly housing expenses (PITI). Finally, it works backward, considering property taxes, homeowner's insurance, and estimated PMI, to calculate the maximum loan amount and, consequently, the affordable house price.
Example Scenario:
Let's consider a couple with a combined Annual Household Income of $120,000. They have Total Monthly Debt Payments (car loan, student loans) of $700. They have saved a Down Payment of $30,000. They estimate a mortgage Interest Rate of 6.5% over a 30-year Loan Term. They anticipate Annual Property Taxes of $4,800 ($400/month) and Annual Homeowner's Insurance of $1,200 ($100/month). Since their down payment is less than 20% for a potential purchase, they estimate PMI at 0.75% of the loan amount annually.
Using the calculator with these inputs:
Gross Monthly Income: $120,000 / 12 = $10,000
Maximum Total Monthly Payment (36% DTI): $10,000 * 0.36 = $3,600
Maximum Affordable PITI: $3,600 (Max Total Payment) – $700 (Existing Debts) = $2,900
Therefore, based on these estimates, the couple might be able to afford a home priced around $379,000.
Important Considerations:
This calculator provides an estimate. Your actual borrowing power can be influenced by many other factors, including your credit score, employment history, assets, lender-specific requirements, and the specific loan program you choose. It's always recommended to speak with a mortgage lender or broker for a pre-approval and a more accurate assessment of your financial situation.