Understanding how much you can afford for a mortgage is a crucial first step in the home-buying process. This calculator helps you estimate your potential mortgage payment based on your income, debts, and other financial factors. By inputting your information, you can get a clearer picture of your borrowing capacity and make more informed decisions when searching for your dream home.
A mortgage is a loan used either by purchasers of real estate to raise funds to buy a property, or by existing property owners to raise funds for many purposes, usually for home improvements, consolidation of debt, or other expenditures. The loan is "secured" on the borrower's residence, meaning that the lending institution can seize the home if the borrower fails to "repay the loan".
Mortgage Affordability Estimate
function calculateMortgageAffordability() {
var grossAnnualIncome = parseFloat(document.getElementById("grossAnnualIncome").value);
var monthlyDebtPayments = parseFloat(document.getElementById("monthlyDebtPayments").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Basic validation
if (isNaN(grossAnnualIncome) || grossAnnualIncome <= 0 ||
isNaN(monthlyDebtPayments) || monthlyDebtPayments < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// DTI (Debt-to-Income) ratio is a common metric used by lenders.
// A common guideline is that total housing costs (including PITI) should not exceed 28% of gross monthly income,
// and total debt (including housing) should not exceed 36% of gross monthly income.
// We'll aim for a conservative estimate here.
var grossMonthlyIncome = grossAnnualIncome / 12;
var maxHousingPayment = grossMonthlyIncome * 0.28; // Maximum allowed for principal, interest, taxes, and insurance (PITI)
var maxTotalDebtPayment = grossMonthlyIncome * 0.36; // Maximum allowed for all debts
var maxMonthlyMortgagePayment = maxTotalDebtPayment – monthlyDebtPayments;
// Ensure the maximum monthly mortgage payment is not negative
if (maxMonthlyMortgagePayment 0 && numberOfPayments > 0) {
// Rearrange the formula to solve for P: P = M * [ (1 + i)^n – 1] / [ i(1 + i)^n ]
var factor = Math.pow(1 + monthlyInterestRate, numberOfPayments);
maximumLoanAmount = affordableMonthlyMortgagePayment * (factor – 1) / (monthlyInterestRate * factor);
}
// The total affordable home price is the maximum loan amount plus the down payment
var affordableHomePrice = maximumLoanAmount + downPayment;
// Display the results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
resultDiv.innerHTML =
"Estimated Maximum Affordable Monthly Mortgage Payment (PITI): " + formatter.format(affordableMonthlyMortgagePayment) + "" +
"Estimated Maximum Loan Amount: " + formatter.format(maximumLoanAmount) + "" +
"Estimated Maximum Affordable Home Price: " + formatter.format(affordableHomePrice) + "" +
"This is an estimate. Actual mortgage approval depends on lender's specific underwriting criteria, credit score, loan type, property taxes, insurance costs, and other factors.";
}
.calculator-container {
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 500px;
margin: 20px auto;
background-color: #f9f9f9;
}
.form-group {
margin-bottom: 15px;
}
.form-group label {
display: block;
margin-bottom: 5px;
font-weight: bold;
}
.form-group input[type="number"],
.form-group input[type="text"] {
width: calc(100% – 12px);
padding: 8px;
border: 1px solid #ccc;
border-radius: 4px;
}
button {
background-color: #4CAF50;
color: white;
padding: 10px 15px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 16px;
}
button:hover {
background-color: #45a049;
}
.result-area {
margin-top: 20px;
padding: 15px;
background-color: #e9e9e9;
border: 1px solid #ddd;
border-radius: 4px;
}