Mortgage Calculator by Income
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Mortgage Affordability Calculator
Estimate how much house you can afford based on your income and expenses.
Your Estimated Affordability
Maximum Loan Amount: $–
Maximum Home Price: $–
Estimated Monthly P&I Payment: $–
Your Debt-to-Income Ratio (DTI): –%
Affordability Score: –/10
Understanding Mortgage Affordability and the DTI Ratio
Determining how much house you can afford is a crucial step in the home-buying process. While lenders look at many factors, your income and existing debt obligations play a significant role. This Mortgage Affordability Calculator by Income helps you estimate your purchasing power by considering your annual income, current debts, available down payment, and estimated homeownership costs.
The key metric lenders use to assess your ability to manage a mortgage is the Debt-to-Income Ratio (DTI). It's a comparison of your total monthly debt payments to your gross monthly income.
How the Calculator Works:
This calculator estimates your maximum affordable home price by working through these steps:
- Gross Monthly Income: Your
annualIncome is divided by 12 to get your gross monthly income.
- Maximum Allowable Monthly Debt (DTI Limit): Lenders typically have DTI limits. A common guideline is that your total housing expenses (Principal, Interest, Taxes, Insurance – PITI) plus your other monthly debts should not exceed 43% of your gross monthly income. Some lenders allow up to 50%. For this calculator, we use a flexible DTI consideration. We first calculate your current debt burden and then determine the remaining capacity for a mortgage payment.
- Monthly Housing Costs (PITI): This includes:
- Principal & Interest (P&I): The core mortgage payment, calculated using the loan amount, interest rate, and loan term.
- Property Taxes: Estimated from the
propertyTaxRate applied to the home's value and divided by 12.
- Homeowner's Insurance: Your estimated annual cost divided by 12.
- PMI (if applicable): Private Mortgage Insurance, often required if your down payment is less than 20% of the home price. Estimated from your input and divided by 12.
- Maximum Affordable Monthly Mortgage Payment: This is calculated by taking a portion of your gross monthly income (e.g., up to 36% for housing, a common front-end DTI benchmark) and subtracting your existing
monthlyDebt payments.
- Maximum Loan Amount: Using the maximum affordable monthly mortgage payment (P&I portion only), the calculator determines the largest loan you could qualify for.
- Maximum Home Price: This is calculated by adding your
downPayment to the calculated maxLoanAmount.
- Debt-to-Income Ratio (DTI): Calculated as
(Total Monthly Debts + Estimated Monthly P&I) / Gross Monthly Income. This is a crucial figure lenders review.
- Affordability Score: A simplified score (out of 10) indicating how well your financial profile aligns with typical lending standards, considering DTI and income vs. expenses.
Key Financial Metrics Explained:
- Gross Monthly Income: The total income earned before any deductions (taxes, insurance premiums, etc.).
- Total Monthly Debt Payments: Includes minimum payments for credit cards, student loans, car loans, personal loans, and any other recurring debt obligations (excluding utilities or rent).
- Principal & Interest (P&I): The part of your monthly mortgage payment that covers the loan itself (principal) and the cost of borrowing (interest).
- Property Taxes: Local taxes levied on the value of your property. These are typically paid monthly into an escrow account managed by your lender.
- Homeowner's Insurance: Covers damages to your home and personal property. Also usually paid via escrow.
- Private Mortgage Insurance (PMI): An insurance premium paid by the borrower to the lender if the down payment is less than 20%.
- Debt-to-Income Ratio (DTI): A ratio used by lenders to measure how much of your monthly income goes towards paying off debts. A lower DTI generally indicates a lower risk to lenders. Common benchmarks are:
- Front-end DTI (Housing Ratio): Housing expenses (PITI) / Gross Monthly Income (often recommended below 28%).
- Back-end DTI (Total DTI): (Housing expenses + Other Debts) / Gross Monthly Income (often recommended below 36%, with maximums around 43%-50% depending on lender and loan type).
This calculator focuses on the back-end DTI.
Example Scenario:
Let's say you have:
- Annual Household Income: $90,000
- Total Monthly Debt Payments (car loan, student loan): $600
- Down Payment: $30,000
- Estimated Interest Rate: 7.0%
- Loan Term: 30 years
- Annual Property Tax Rate: 1.3%
- Annual Homeowner's Insurance: $1,500
- Annual PMI: $1,000 (for a down payment less than 20%)
Using the calculator with these inputs:
- Gross Monthly Income = $90,000 / 12 = $7,500
- Estimated Monthly P&I (for a hypothetical loan that fits within affordability) would need to be around $1,600 to keep total housing + debt around 43% of income.
- Maximum Loan Amount could be estimated around $240,000 (this is a simplified reverse calculation based on assumed P&I).
- Maximum Home Price = $240,000 (Loan) + $30,000 (Down Payment) = $270,000
- Estimated Monthly P&I Payment (for a $240,000 loan at 7.0% for 30 yrs) is approximately $1,597.
- Estimated Monthly Property Tax = ($270,000 * 1.3%) / 12 = $292.50
- Estimated Monthly Home Insurance = $1,500 / 12 = $125
- Estimated Monthly PMI = $1,000 / 12 = $83.33
- Total Estimated Monthly Housing Payment (PITI + PMI) = $1,597 + $292.50 + $125 + $83.33 = $2,097.83
- Total Monthly Debt (Housing + Other) = $2,097.83 + $600 = $2,697.83
- Debt-to-Income Ratio = ($2,697.83 / $7,500) * 100% ≈ 36.0%
In this example, a DTI of 36.0% is generally favorable. The calculator would provide the maximum affordable loan amount and home price based on these inputs and typical lending guidelines.
Important Considerations:
This calculator provides an estimate. Actual loan approval depends on many factors, including your credit score, employment history, lender-specific guidelines, prevailing interest rates, and the housing market. It's always recommended to speak with a mortgage professional for personalized advice and pre-approval.
function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var propertyTaxRate = parseFloat(document.getElementById("propertyTaxRate").value);
var homeInsurance = parseFloat(document.getElementById("homeInsurance").value);
var pmi = parseFloat(document.getElementById("pmi").value);
var resultElement = document.getElementById("result");
var maxLoanAmountElement = document.getElementById("maxLoanAmount").querySelector('span');
var maxHomePriceElement = document.getElementById("maxHomePrice").querySelector('span');
var monthlyPaymentEstElement = document.getElementById("monthlyPaymentEst").querySelector('span');
var debtToIncomeRatioElement = document.getElementById("debtToIncomeRatio").querySelector('span');
var affordabilityScoreElement = document.getElementById("affordabilityScore").querySelector('span');
// Clear previous results
maxLoanAmountElement.textContent = "-";
maxHomePriceElement.textContent = "-";
monthlyPaymentEstElement.textContent = "-";
debtToIncomeRatioElement.textContent = "-";
affordabilityScoreElement.textContent = "-";
// Input validation
if (isNaN(annualIncome) || annualIncome <= 0 ||
isNaN(monthlyDebt) || monthlyDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate < 0 ||
isNaN(loanTerm) || loanTerm <= 0 ||
isNaN(propertyTaxRate) || propertyTaxRate < 0 ||
isNaN(homeInsurance) || homeInsurance < 0 ||
isNaN(pmi) || pmi < 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
var grossMonthlyIncome = annualIncome / 12;
var monthlyInterestRate = (interestRate / 100) / 12;
var termInMonths = loanTerm * 12;
// — Calculation Logic —
// We'll use a common lending guideline: Total Debt (including proposed mortgage PITI) <= 43% of Gross Monthly Income
// And a common housing-only guideline: PITI <= 36% of Gross Monthly Income
// We need to find a loan amount where the PITI fits within these constraints.
var maxAllowedTotalDebtPayment = grossMonthlyIncome * 0.43;
var maxAllowedHousingPayment = grossMonthlyIncome * 0.36; // Using 36% as a general guideline for PITI
// Let's iterate or use a solver to find the max loan amount.
// A simpler approach: assume a target P&I payment and calculate backward.
// A target P&I payment that leaves room for taxes, insurance, PMI, and existing debt within the 43% DTI.
var affordableLoanAmount = 0;
var estimatedMonthlyPAndI = 0;
var affordabilityScore = 0;
// Iterate to find a reasonable loan amount that fits within a realistic PITI budget
// We'll try to find a loan amount where the P&I + Taxes + Insurance + PMI is <= maxAllowedHousingPayment
// And (P&I + Taxes + Insurance + PMI) + monthlyDebt <= maxAllowedTotalDebtPayment
// Start with a reasonable P&I payment that is less than the max allowed housing payment
var targetMonthlyPI = maxAllowedHousingPayment – (homeInsurance / 12) – (pmi / 12);
if (targetMonthlyPI 0) {
var power = Math.pow(1 + monthlyInterestRate, termInMonths);
var potentialLoanAmount = (targetMonthlyPI * (power – 1)) / (monthlyInterestRate * power);
} else { // Handle 0% interest rate case
var potentialLoanAmount = targetMonthlyPI * termInMonths;
}
// Now, let's consider the *total* debt limit (43%)
// Calculate the total estimated monthly housing cost (PITI + PMI) for this potential loan amount
var estimatedAnnualTaxes = 0;
if (propertyTaxRate > 0) {
// Property tax is based on the *home price*, which is loan amount + down payment.
// This creates a circular dependency if we try to precisely solve.
// We'll estimate taxes based on a *potential* home price derived from the loan amount.
// A common heuristic: Home Price is roughly Loan Amount * 1.25 (assuming ~20% down is ideal) or Loan Amount + Down Payment.
// For simplicity here, we'll estimate taxes based on the *final home price* if we find a solution.
// Let's re-evaluate: we need to find a loan amount that *results* in a total DTI <= 43%.
// Let's work backwards from the DTI limits more directly.
// We know: (P&I + Taxes + Insurance + PMI) + MonthlyDebt <= GrossMonthlyIncome * 0.43
// P&I + (HomePrice * TaxRate/12) + (Insurance/12) + (PMI/12) <= GrossMonthlyIncome * 0.43 – MonthlyDebt
// P&I + ((LoanAmount + DownPayment) * TaxRate/12) <= GrossMonthlyIncome * 0.43 – MonthlyDebt – (Insurance/12) – (PMI/12)
// (LoanAmount * M) + ((LoanAmount + DownPayment) * T) 0) {
var power = Math.pow(1 + monthlyInterestRate, termInMonths);
maxLoanAmountPI = (maxPIBasedOnHousingRatio * (power – 1)) / (monthlyInterestRate * power);
} else {
maxLoanAmountPI = maxPIBasedOnHousingRatio * termInMonths;
}
// Step 2: Calculate the max loan amount based on total DTI (43%)
// Max total payment allowed = GrossMonthlyIncome * 0.43
// Max P&I = (GrossMonthlyIncome * 0.43) – MonthlyDebt – (HomeInsurance/12) – (PMI/12) – (EstimatedAnnualTaxes/12)
// This still requires knowing the Home Price for taxes.
// Let's assume a loan-to-value ratio (LTV) to estimate home price for tax calculation.
// A safe assumption is the final loan amount + down payment.
// We can iteratively refine.
var currentMaxLoan = maxLoanAmountPI; // Start with the PI-limited amount
var iterations = 0;
var MAX_ITERATIONS = 50;
var tolerance = 0.01; // For convergence
while (iterations < MAX_ITERATIONS) {
var estimatedHomePrice = currentMaxLoan + downPayment;
var estimatedMonthlyTaxes = (estimatedHomePrice * (propertyTaxRate / 100)) / 12;
var totalMonthlyHousingCosts = (homeInsurance / 12) + (pmi / 12) + estimatedMonthlyTaxes;
var maxAllowedPIForDTI = (grossMonthlyIncome * 0.43) – monthlyDebt – totalMonthlyHousingCosts;
if (maxAllowedPIForDTI 0) {
var power = Math.pow(1 + monthlyInterestRate, termInMonths);
calculatedLoanAmountFromDTI = (maxAllowedPIForDTI * (power – 1)) / (monthlyInterestRate * power);
} else {
calculatedLoanAmountFromDTI = maxAllowedPIForDTI * termInMonths;
}
// Compare the calculated loan amount with the current estimate
var diff = currentMaxLoan – calculatedLoanAmountFromDTI;
if (Math.abs(diff) < tolerance) {
affordableLoanAmount = currentMaxLoan;
break; // Converged
}
// Adjust currentMaxLoan based on the difference
// If calculatedLoanAmountFromDTI is smaller, it means our currentMaxLoan was too high.
// If calculatedLoanAmountFromDTI is larger, it means our currentMaxLoan was too low.
currentMaxLoan = calculatedLoanAmountFromDTI; // Move towards the calculated value
iterations++;
}
if (iterations === MAX_ITERATIONS) {
affordableLoanAmount = currentMaxLoan; // Use the last estimate
}
// Ensure the affordable loan amount doesn't exceed the PI-limited amount
affordableLoanAmount = Math.min(affordableLoanAmount, maxLoanAmountPI);
if (affordableLoanAmount 0) {
var power = Math.pow(1 + monthlyInterestRate, termInMonths);
finalMonthlyPAndI = (affordableLoanAmount * monthlyInterestRate * power) / (power – 1);
} else {
finalMonthlyPAndI = affordableLoanAmount / termInMonths;
}
if (isNaN(finalMonthlyPAndI) || !isFinite(finalMonthlyPAndI) || finalMonthlyPAndI < 0) finalMonthlyPAndI = 0;
if (isNaN(finalEstimatedMonthlyTaxes) || !isFinite(finalEstimatedMonthlyTaxes) || finalEstimatedMonthlyTaxes < 0) finalEstimatedMonthlyTaxes = 0;
estimatedMonthlyPAndI = finalMonthlyPAndI;
var totalMonthlyHousingPayment = finalMonthlyPAndI + finalEstimatedMonthlyTaxes + (homeInsurance / 12) + (pmi / 12);
var totalMonthlyObligations = totalMonthlyHousingPayment + monthlyDebt;
var finalDTI = (totalMonthlyObligations / grossMonthlyIncome) * 100;
if (isNaN(finalDTI) || !isFinite(finalDTI)) finalDTI = 0;
// Calculate Affordability Score (simplified)
// Based on DTI and potential income margin
var score = 0;
if (finalDTI <= 30) score = 9;
else if (finalDTI <= 36) score = 8;
else if (finalDTI <= 40) score = 7;
else if (finalDTI <= 43) score = 6;
else if (finalDTI <= 45) score = 5;
else if (finalDTI <= 48) score = 4;
else if (finalDTI <= 50) score = 3;
else if (finalDTI grossMonthlyIncome * 0.3) { // If remaining income is > 30% of gross
score = Math.min(score + 1, 10);
} else if (incomeMargin < 0) { // If expenses exceed income
score = Math.max(score – 1, 0);
}
affordabilityScore = score;
maxLoanAmountElement.textContent = formatCurrency(affordableLoanAmount);
maxHomePriceElement.textContent = formatCurrency(finalEstimatedHomePrice);
monthlyPaymentEstElement.textContent = formatCurrency(estimatedMonthlyPAndI);
debtToIncomeRatioElement.textContent = finalDTI.toFixed(1);
affordabilityScoreElement.textContent = affordabilityScore.toFixed(0);
} else { // Handle zero interest rate scenario for P&I calculation
// If interest rate is 0, P&I is simply LoanAmount / termInMonths.
// This case is less common for mortgages but handled for completeness.
var maxPIBasedOnHousingRatio = grossMonthlyIncome * 0.36;
var maxLoanAmountPI = maxPIBasedOnHousingRatio * termInMonths; // Simple division
var currentMaxLoan = maxLoanAmountPI;
var iterations = 0;
var MAX_ITERATIONS = 50;
var tolerance = 0.01;
while (iterations < MAX_ITERATIONS) {
var estimatedHomePrice = currentMaxLoan + downPayment;
var estimatedMonthlyTaxes = (estimatedHomePrice * (propertyTaxRate / 100)) / 12;
var totalMonthlyHousingCosts = (homeInsurance / 12) + (pmi / 12) + estimatedMonthlyTaxes;
var maxAllowedPIForDTI = (grossMonthlyIncome * 0.43) – monthlyDebt – totalMonthlyHousingCosts;
if (maxAllowedPIForDTI < 0) maxAllowedPIForDTI = 0;
var calculatedLoanAmountFromDTI = maxAllowedPIForDTI * termInMonths;
var diff = currentMaxLoan – calculatedLoanAmountFromDTI;
if (Math.abs(diff) < tolerance) {
affordableLoanAmount = currentMaxLoan;
break;
}
currentMaxLoan = calculatedLoanAmountFromDTI;
iterations++;
}
if (iterations === MAX_ITERATIONS) {
affordableLoanAmount = currentMaxLoan;
}
affordableLoanAmount = Math.min(affordableLoanAmount, maxLoanAmountPI);
if (affordableLoanAmount < 0) affordableLoanAmount = 0;
var finalEstimatedHomePrice = affordableLoanAmount + downPayment;
var finalEstimatedMonthlyTaxes = (finalEstimatedHomePrice * (propertyTaxRate / 100)) / 12;
var finalMonthlyPAndI = affordableLoanAmount / termInMonths;
if (isNaN(finalMonthlyPAndI) || !isFinite(finalMonthlyPAndI) || finalMonthlyPAndI < 0) finalMonthlyPAndI = 0;
if (isNaN(finalEstimatedMonthlyTaxes) || !isFinite(finalEstimatedMonthlyTaxes) || finalEstimatedMonthlyTaxes < 0) finalEstimatedMonthlyTaxes = 0;
estimatedMonthlyPAndI = finalMonthlyPAndI;
var totalMonthlyHousingPayment = finalMonthlyPAndI + finalEstimatedMonthlyTaxes + (homeInsurance / 12) + (pmi / 12);
var totalMonthlyObligations = totalMonthlyHousingPayment + monthlyDebt;
var finalDTI = (totalMonthlyObligations / grossMonthlyIncome) * 100;
if (isNaN(finalDTI) || !isFinite(finalDTI)) finalDTI = 0;
var score = 0;
if (finalDTI <= 30) score = 9;
else if (finalDTI <= 36) score = 8;
else if (finalDTI <= 40) score = 7;
else if (finalDTI <= 43) score = 6;
else if (finalDTI <= 45) score = 5;
else if (finalDTI <= 48) score = 4;
else if (finalDTI <= 50) score = 3;
else if (finalDTI grossMonthlyIncome * 0.3) {
score = Math.min(score + 1, 10);
} else if (incomeMargin < 0) {
score = Math.max(score – 1, 0);
}
affordabilityScore = score;
maxLoanAmountElement.textContent = formatCurrency(affordableLoanAmount);
maxHomePriceElement.textContent = formatCurrency(finalEstimatedHomePrice);
monthlyPaymentEstElement.textContent = formatCurrency(estimatedMonthlyPAndI);
debtToIncomeRatioElement.textContent = finalDTI.toFixed(1);
affordabilityScoreElement.textContent = affordabilityScore.toFixed(0);
}
}
function formatCurrency(amount) {
if (isNaN(amount) || !isFinite(amount) || amount < 0) {
return "$ -";
}
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}