This calculator helps you estimate how much house you can afford based on your income, debts, and down payment. It's a crucial step in the home-buying process to understand your potential borrowing capacity.
Your Estimated Mortgage Affordability:
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Understanding Mortgage Affordability
Lenders typically use a debt-to-income (DTI) ratio to determine how much you can borrow. There are generally two DTI limits considered:
Front-end DTI (Housing Ratio): This ratio compares your total proposed housing costs (principal, interest, taxes, insurance, HOA fees) to your gross monthly income. A common guideline is that this should not exceed 28% of your gross monthly income.
Back-end DTI (Total Debt Ratio): This ratio compares your total monthly debt obligations (including the proposed mortgage payment, student loans, car payments, credit card minimums, etc.) to your gross monthly income. A common guideline is that this should not exceed 36% of your gross monthly income.
This calculator simplifies this by using a common DTI threshold to estimate your maximum affordable monthly mortgage payment. It then calculates the maximum loan amount and, considering your down payment, the maximum home price you might afford.
Important Considerations:
This is an estimation. Actual loan approval depends on lender policies, credit score, loan type, property taxes, insurance costs, and other factors.
Always consult with a mortgage professional for personalized advice.
The estimated interest rate significantly impacts your monthly payment and affordability.
Taxes, insurance (homeowner's and potentially PMI), and HOA fees (if applicable) are critical components of your total housing cost and are not explicitly factored into this simplified DTI calculation but are essential for a complete picture.
function calculateMortgageAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var currentMonthlyDebts = parseFloat(document.getElementById("currentMonthlyDebts").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultsDiv = document.getElementById("results");
var mortgageResultDiv = document.getElementById("mortgageResult");
var maxLoanAmountResultDiv = document.getElementById("maxLoanAmountResult");
var maxHomePriceResultDiv = document.getElementById("maxHomePriceResult");
// Clear previous results
mortgageResultDiv.innerHTML = "–";
maxLoanAmountResultDiv.innerHTML = "–";
maxHomePriceResultDiv.innerHTML = "–";
// Input validation
if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0) {
alert("Please enter a valid Gross Monthly Income.");
return;
}
if (isNaN(currentMonthlyDebts)) {
currentMonthlyDebts = 0; // Treat as 0 if not entered or invalid
}
if (isNaN(downPayment) || downPayment < 0) {
downPayment = 0; // Treat as 0 if not entered or invalid
}
if (isNaN(interestRate) || interestRate <= 0) {
alert("Please enter a valid Annual Interest Rate.");
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please enter a valid Loan Term in Years.");
return;
}
// — Calculations —
// Assuming a common back-end DTI limit of 36% (this is a guideline, lenders vary)
var maxTotalDebtPayment = grossMonthlyIncome * 0.36;
var maxMortgagePayment = maxTotalDebtPayment – currentMonthlyDebts;
if (maxMortgagePayment 0 && loanTermMonths > 0) {
// Formula for Present Value of an Ordinary Annuity
// PV = PMT * [1 – (1 + r)^-n] / r
maxLoanAmount = maxMortgagePayment * (1 – Math.pow(1 + monthlyInterestRate, -loanTermMonths)) / monthlyInterestRate;
}
var maxHomePrice = maxLoanAmount + downPayment;
// Format currency for display
var formatCurrency = function(amount) {
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$1,');
};
mortgageResultDiv.innerHTML = "Estimated Maximum Monthly Mortgage Payment (P&I only): " + formatCurrency(maxMortgagePayment);
maxLoanAmountResultDiv.innerHTML = "Estimated Maximum Loan Amount: " + formatCurrency(maxLoanAmount);
maxHomePriceResultDiv.innerHTML = "Estimated Maximum Home Price: " + formatCurrency(maxHomePrice);
}
.calculator-container {
font-family: sans-serif;
max-width: 800px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ddd;
border-radius: 8px;
background-color: #f9f9f9;
}
.calculator-container h2 {
text-align: center;
margin-bottom: 15px;
color: #333;
}
.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: #555;
}
.input-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1rem;
}
.calculator-container button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 5px;
font-size: 1.1rem;
cursor: pointer;
transition: background-color 0.3s ease;
margin-top: 10px;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calculator-results {
margin-top: 25px;
padding: 15px;
border: 1px solid #eee;
border-radius: 5px;
background-color: #fff;
text-align: center;
}
.calculator-results h3 {
margin-top: 0;
color: #444;
}
#mortgageResult,
#maxLoanAmountResult,
#maxHomePriceResult {
font-size: 1.2rem;
font-weight: bold;
margin-top: 10px;
color: #007bff;
}
.calculator-explanation {
margin-top: 30px;
padding-top: 20px;
border-top: 1px solid #eee;
color: #333;
font-size: 0.95rem;
line-height: 1.6;
}
.calculator-explanation h3 {
color: #444;
margin-bottom: 10px;
}
.calculator-explanation ul {
margin-left: 20px;
margin-bottom: 15px;
}
.calculator-explanation li {
margin-bottom: 8px;
}