Cash Loan Interest Rate Calculator

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Mortgage Affordability Calculator body { font-family: sans-serif; margin: 20px; } label { display: inline-block; width: 150px; margin-bottom: 10px; } input[type="number"] { width: 100px; padding: 5px; margin-bottom: 10px; } button { padding: 10px 15px; cursor: pointer; } #result { margin-top: 20px; font-weight: bold; }

Mortgage Affordability Calculator

This calculator helps you estimate how much you might be able to borrow for a mortgage based on your income and existing debts.






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); var loanTermYears = parseInt(document.getElementById("loanTermYears").value); var resultDiv = document.getElementById("result"); resultDiv.innerHTML = ""; // Clear previous results // Input validation if (isNaN(annualIncome) || annualIncome < 0 || isNaN(monthlyDebtPayments) || monthlyDebtPayments < 0 || isNaN(downPayment) || downPayment < 0 || isNaN(interestRate) || interestRate 100 || isNaN(loanTermYears) || loanTermYears < 1) { resultDiv.innerHTML = "Please enter valid numbers for all fields."; return; } // — Calculation Logic — // Assume lenders typically allow a Debt-to-Income (DTI) ratio of up to 43% var maxDTI = 0.43; // Calculate maximum allowable monthly housing payment (Principal, Interest, Taxes, Insurance – PITI) var grossMonthlyIncome = annualIncome / 12; var maxAllowableDebtPayment = grossMonthlyIncome * maxDTI; var maxMonthlyPiti = maxAllowableDebtPayment – monthlyDebtPayments; // Ensure the maximum monthly PITI is not negative if (maxMonthlyPiti 0) { var numerator = monthlyInterestRate * Math.pow((1 + monthlyInterestRate), numberOfPayments); var denominator = Math.pow((1 + monthlyInterestRate), numberOfPayments) – 1; maxLoanAmount = maxMonthlyPiti * (denominator / numerator); } else { // Handle 0% interest rate case maxLoanAmount = maxMonthlyPiti * numberOfPayments; } // Calculate the maximum home price var maxHomePrice = maxLoanAmount + downPayment; // — Display Results — resultDiv.innerHTML = "

Estimated Mortgage Affordability:

" + "Maximum allowable monthly housing payment (PITI): $" + maxMonthlyPiti.toFixed(2) + "" + "Estimated maximum loan amount: $" + maxLoanAmount.toFixed(2) + "" + "Estimated maximum home price you could afford: $" + maxHomePrice.toFixed(2) + ""; }

Understanding Mortgage Affordability

Mortgage affordability refers to the maximum amount of money a lender is willing to lend you for a property, based on your financial situation. Several key factors influence this calculation:

  • Annual Income: Your total earnings before taxes. Lenders want to see a stable and sufficient income to cover mortgage payments and other expenses.
  • Monthly Debt Payments: This includes all your existing recurring debts like credit card payments, student loans, car loans, and other personal loans. A lower debt-to-income ratio is generally preferred.
  • Down Payment: The upfront cash you pay towards the purchase of the home. A larger down payment reduces the loan amount needed and can improve your chances of approval.
  • Interest Rate: The percentage charged by the lender for borrowing money. Higher interest rates mean higher monthly payments and a lower borrowing capacity for a given monthly payment.
  • Loan Term: The length of time over which you agree to repay the loan (typically 15, 20, or 30 years). Longer terms result in lower monthly payments but more interest paid over time.

How the Calculator Works:

This calculator uses a common guideline where lenders aim for your total monthly debt payments (including the estimated mortgage payment) to not exceed 43% of your gross monthly income. It first determines the maximum amount you can afford for your total monthly housing expenses (Principal, Interest, Taxes, and Insurance – PITI) after accounting for your existing debts. Then, it uses a standard mortgage payment formula to calculate the maximum loan amount you could secure with that PITI, given your specified interest rate and loan term. Finally, it adds your down payment to this maximum loan amount to estimate the highest-priced home you could potentially afford.

Important Note: This calculator provides an estimate. Actual mortgage approval depends on many other factors, including your credit score, lender-specific policies, employment history, and the property's appraisal value. It's always recommended to speak with a mortgage professional for personalized advice.

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