This calculator helps you estimate how much you can afford to borrow for a mortgage based on your income, debts, and estimated interest rate.
.calculator-container {
font-family: sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 500px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-container h2 {
text-align: center;
margin-bottom: 15px;
color: #333;
}
.calculator-container p {
text-align: center;
margin-bottom: 20px;
color: #555;
font-size: 0.9em;
}
.input-section {
margin-bottom: 15px;
}
.input-section label {
display: block;
margin-bottom: 5px;
font-weight: bold;
color: #444;
}
.input-section input[type="number"] {
width: calc(100% – 20px);
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
box-sizing: border-box;
}
button {
display: block;
width: 100%;
padding: 12px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 16px;
margin-top: 10px;
}
button:hover {
background-color: #0056b3;
}
#result {
margin-top: 25px;
padding: 15px;
background-color: #e9ecef;
border: 1px solid #ced4da;
border-radius: 4px;
text-align: center;
font-size: 1.1em;
color: #333;
}
function calculateMortgageAffordability() {
var monthlyIncome = parseFloat(document.getElementById("monthlyIncome").value);
var existingDebts = parseFloat(document.getElementById("existingDebts").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(monthlyIncome) || isNaN(existingDebts) || isNaN(downPayment) || isNaN(annualInterestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
// Rule of thumb: Debt-to-Income Ratio (DTI) should not exceed 43% for mortgage approval.
// This includes PITI (Principal, Interest, Taxes, Insurance) plus other debts.
// We'll estimate PITI as the maximum monthly housing expense.
var maxMonthlyHousingExpense = (monthlyIncome * 0.43) – existingDebts;
if (maxMonthlyHousingExpense <= 0) {
resultDiv.innerHTML = "Based on your income and existing debts, your affordable mortgage payment is $0.";
return;
}
// Calculate the maximum loan amount based on maxMonthlyHousingExpense
// This requires an iterative approach or an approximation since mortgage payment depends on loan amount.
// A common simplification is to assume taxes and insurance (TI) are a percentage of the home price or a fixed amount.
// For simplicity here, we'll assume TI is ~20% of the monthly housing expense, leaving 80% for P&I.
// A more precise calculation would involve solving for P directly in the mortgage payment formula.
// Let's use an approximation by assuming typical P&I vs TI split.
// Alternatively, we can iterate to find the loan amount.
// Let's use a common financial formula for mortgage payment (M):
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where:
// P = Principal loan amount
// i = monthly interest rate (annualRate / 12 / 100)
// n = total number of payments (loanTerm * 12)
// We need to find P. Rearranging the formula is complex.
// A common approach is to iterate or use a financial calculator's internal logic.
// For this calculator, we'll use a simplified approach:
// We assume a portion of the maxMonthlyHousingExpense goes towards Principal and Interest (P&I).
// Let's assume P&I is 80% of the max monthly housing expense for calculation purposes.
// This is a simplification and actual affordability depends on many factors.
var estimatedAnnualTaxesAndInsurance = maxMonthlyHousingExpense * 0.15; // Rough estimate
var principalAndInterestBudget = maxMonthlyHousingExpense – estimatedAnnualTaxesAndInsurance;
if (principalAndInterestBudget 0) {
var numerator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
maxLoanAmount = principalAndInterestBudget * (numerator / denominator);
} else {
// Handle zero interest rate case (though unlikely for mortgages)
maxLoanAmount = principalAndInterestBudget * numberOfPayments;
}
var maxAffordableHomePrice = maxLoanAmount + downPayment;
resultDiv.innerHTML = "Estimated Maximum Affordable Home Price: $" + maxAffordableHomePrice.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "" +
"Estimated Maximum Loan Amount: $" + maxLoanAmount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "" +
"Estimated Maximum Monthly P&I Payment: $" + principalAndInterestBudget.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "";
}
Understanding Mortgage Affordability
Determining how much you can afford for a mortgage is a crucial step in the home-buying process. It's not just about the price tag of a house; it's about managing your finances responsibly to ensure you can comfortably make payments for years to come. Several key factors influence your mortgage affordability:
Gross Monthly Income: This is your income before taxes and other deductions. Lenders use this to gauge your ability to repay the loan.
Existing Monthly Debt Payments: This includes all recurring monthly obligations such as car loans, student loans, credit card minimum payments, and any other personal loans. Lenders consider these when calculating your Debt-to-Income (DTI) ratio.
Down Payment: The amount of money you pay upfront towards the purchase price of the home. A larger down payment reduces the loan amount needed and can potentially lead to better loan terms.
Interest Rate: The percentage charged by the lender for borrowing money. Even a small difference in interest rate can significantly impact your monthly payment and the total interest paid over the life of the loan.
Loan Term: The duration of the mortgage, typically 15, 20, or 30 years. Longer terms mean lower monthly payments but more interest paid overall.
How the Calculator Works:
This calculator uses a common guideline where your total monthly debt payments, including your estimated mortgage payment (principal, interest, taxes, and insurance – often referred to as PITI), should not exceed 43% of your gross monthly income. The calculator first determines the maximum amount you can allocate to housing costs after accounting for your existing debts. It then estimates a portion for property taxes and homeowner's insurance, leaving the remainder for your monthly principal and interest payment. Using this P&I budget, the annual interest rate, and the loan term, the calculator estimates the maximum loan amount you can qualify for and subsequently, the maximum home price you might be able to afford with your specified down payment.
Important Considerations:
This calculator provides an estimate. Lenders have specific underwriting criteria, and your actual borrowing capacity may differ. It's essential to get pre-approved by a lender to get a precise figure. Remember to also factor in closing costs, moving expenses, potential home maintenance, and a comfortable living budget beyond just your mortgage payment.