Buying a home is a significant financial decision, and understanding how much you can afford is a crucial first step.
Our Mortgage Affordability Calculator helps you estimate the maximum mortgage loan you can qualify for based on your income,
debts, and a few other key financial factors. This calculator is designed to give you a realistic idea of your borrowing
capacity, enabling you to narrow down your home search to properties within your budget.
Key Factors in Mortgage Affordability:
Gross Monthly Income: This is your income before taxes and deductions. Lenders look at this to determine
your ability to make monthly payments.
Existing Monthly Debt Payments: This includes payments for credit cards, auto loans, student loans, personal loans,
and any other recurring debts. High debt-to-income ratios can significantly impact your borrowing power.
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 improve your loan terms.
Estimated Property Taxes: Annual property taxes, divided by 12, are factored into your monthly housing cost.
Estimated Homeowner's Insurance: Annual homeowner's insurance premiums, divided by 12, are also included.
Estimated HOA Fees: If applicable, monthly Homeowners Association fees contribute to your total housing expense.
Interest Rate: The annual interest rate on the mortgage significantly affects your monthly payment and the total interest paid over the life of the loan.
Loan Term: The duration of the mortgage, typically 15 or 30 years. Longer terms mean lower monthly payments but more interest paid overall.
Lenders often use a debt-to-income (DTI) ratio to assess affordability. A common guideline is a front-end DTI (housing costs only)
of around 28% and a back-end DTI (all debts including housing) of around 36%, though these can vary by lender and loan program.
This calculator provides an estimate, and actual loan approval depends on the lender's specific underwriting criteria, credit score,
and other financial circumstances.
Mortgage Affordability Calculator
function calculateMortgageAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var existingMonthlyDebt = parseFloat(document.getElementById("existingMonthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var estimatedPropertyTaxes = parseFloat(document.getElementById("estimatedPropertyTaxes").value);
var estimatedHomeownersInsurance = parseFloat(document.getElementById("estimatedHomeownersInsurance").value);
var estimatedHOAfees = parseFloat(document.getElementById("estimatedHOAfees").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(grossMonthlyIncome) || grossMonthlyIncome <= 0 ||
isNaN(existingMonthlyDebt) || existingMonthlyDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(estimatedPropertyTaxes) || estimatedPropertyTaxes < 0 ||
isNaN(estimatedHomeownersInsurance) || estimatedHomeownersInsurance < 0 ||
isNaN(estimatedHOAfees) || estimatedHOAfees < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
resultDiv.innerHTML = 'Please enter valid positive numbers for all fields.';
return;
}
// Common DTI ratios (can be adjusted)
var maxFrontEndDTIRatio = 0.28; // Housing costs
var maxBackEndDTIRatio = 0.36; // Total debt
var monthlyPropertyTaxes = estimatedPropertyTaxes / 12;
var monthlyHomeownersInsurance = estimatedHomeownersInsurance / 12;
var monthlyTotalHousingCosts = monthlyPropertyTaxes + monthlyHomeownersInsurance + estimatedHOAfees;
// Calculate maximum affordable total monthly housing payment
var maxAffordableHousingPayment = grossMonthlyIncome * maxFrontEndDTIRatio;
// Calculate maximum affordable total monthly debt payment (including housing)
var maxAffordableTotalDebtPayment = grossMonthlyIncome * maxBackEndDTIRatio;
// Maximum monthly mortgage payment allowed based on back-end DTI
var maxAllowedMortgagePayment = maxAffordableTotalDebtPayment – existingMonthlyDebt;
// The actual affordable housing payment is the lower of the two limits
var affordableMonthlyMortgagePayment = Math.min(maxAffordableHousingPayment, maxAllowedMortgagePayment);
// Check if affordableMonthlyMortgagePayment is realistic
if (affordableMonthlyMortgagePayment 0) {
maxLoanAmount = affordableMonthlyMortgagePayment * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else {
// If interest rate is 0, loan amount is simply payment * number of payments (unlikely scenario)
maxLoanAmount = affordableMonthlyMortgagePayment * numberOfPayments;
}
// Calculate the maximum home price
var maxHomePrice = maxLoanAmount + downPayment;
resultDiv.innerHTML = `
Your Estimated Mortgage Affordability:
Estimated Maximum Loan Amount: $${maxLoanAmount.toFixed(2)}
Estimated Maximum Home Price: $${maxHomePrice.toFixed(2)}
Estimated Affordable Monthly Mortgage Payment (Principal & Interest): $${affordableMonthlyMortgagePayment.toFixed(2)}Note: This is an estimate. Actual loan approval and amounts may vary based on lender criteria, credit score, and other factors.
`;
}