Estimate your potential home buying power by entering your financial details.
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Your Estimated Maximum Monthly Payment:
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This is an estimate and does not include property taxes, homeowner's insurance, or HOA fees.
Understanding Your Home Affordability
Buying a home is one of the most significant financial decisions you'll make. The Redfin Home Affordability Calculator is designed to give you a realistic estimate of how much home you can afford, based on common financial guidelines. It helps you understand your maximum potential monthly mortgage payment, which is a crucial factor in determining the price range of homes you should consider.
How the Calculator Works: Key Factors
This calculator uses widely accepted financial principles to estimate your home buying power. Here's a breakdown of the inputs and the underlying logic:
Annual Household Income: This is your gross income before taxes. Lenders often use this figure to determine your debt-to-income ratio (DTI).
Total Monthly Debt Payments (excl. mortgage): This includes all your recurring monthly financial obligations, such as car loans, student loans, personal loans, and credit card minimum payments. It does NOT include your potential mortgage payment, as that's what we're trying to calculate.
Total Savings for Down Payment & Closing Costs: This is the cash you have available upfront. A larger down payment can reduce your loan amount and potentially lower your monthly payments, while also affecting lender approval. Closing costs typically range from 2% to 5% of the loan amount.
Estimated Mortgage Interest Rate (Annual): The interest rate significantly impacts your monthly payment. This calculator uses your provided annual rate to calculate the interest portion of your mortgage. Current market rates are essential for an accurate estimate.
Mortgage Loan Term (Years): This is the duration over which you will repay the mortgage loan (e.g., 15, 30 years). Longer terms result in lower monthly payments but higher total interest paid over the life of the loan.
The Math Behind the Estimate
The calculator primarily focuses on a common guideline: that your total monthly debt payments (including the estimated mortgage principal & interest) should not exceed 28% to 36% of your gross monthly income (this is known as the front-end DTI). We'll use a conservative estimate for the maximum monthly housing payment (Principal & Interest) as a percentage of your gross monthly income. A common benchmark is around 28%.
The calculator first determines your Maximum Allowed Monthly Debt Payment based on your income. Then, it subtracts your existing monthly debts to find the Maximum Monthly Mortgage Payment (P&I) you can afford.
The core formula to calculate the monthly mortgage payment (M) for a given loan amount (P), monthly interest rate (r), and number of payments (n) is the standard mortgage payment formula:
M = P [ r(1 + r)^n ] / [ (1 + r)^n – 1]
Where:
P = Principal Loan Amount (This is calculated indirectly based on the affordable monthly payment, interest rate, and term)
n = Total Number of Payments (Loan Term in Years * 12)
Since we are solving for the monthly payment, the calculation is performed in reverse. We first determine the maximum P&I payment allowed, and then derive the maximum loan amount possible with that payment, rate, and term. The calculator outputs the estimated maximum monthly P&I payment.
Important Considerations
This calculator provides an estimate. Lenders will consider many other factors, including:
Your credit score and history.
Your employment history and stability.
The specific loan program you apply for.
The Loan-to-Value (LTV) ratio, which is influenced by your down payment.
Additionally, your actual monthly housing costs will include:
Property Taxes: Varies significantly by location.
Homeowner's Insurance: Required by lenders.
Private Mortgage Insurance (PMI): Often required if your down payment is less than 20%.
Homeowners Association (HOA) Fees: If applicable to the property.
Use this calculator as a starting point to understand your budget and discuss your options with a mortgage professional.
function calculateAffordability() {
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 resultDisplay = document.getElementById("result-value");
resultDisplay.innerHTML = "–"; // Reset result
// — Input Validation —
if (isNaN(annualIncome) || annualIncome <= 0) {
alert("Please enter a valid Annual Household Income.");
return;
}
if (isNaN(monthlyDebt) || monthlyDebt < 0) { // Monthly debt can be 0
alert("Please enter a valid Total Monthly Debt Payments.");
return;
}
if (isNaN(downPayment) || downPayment < 0) { // Down payment can be 0
alert("Please enter a valid Savings amount.");
return;
}
if (isNaN(interestRate) || interestRate 20) { // Realistic interest rate range
alert("Please enter a valid Estimated Mortgage Interest Rate (e.g., between 1 and 20).");
return;
}
if (isNaN(loanTerm) || loanTerm 50) { // Realistic loan term range
alert("Please enter a valid Mortgage Loan Term (e.g., between 1 and 50 years).");
return;
}
// — End Input Validation —
var grossMonthlyIncome = annualIncome / 12;
// Guideline: Maximum housing expense (PITI) should be ~28% of gross monthly income
// For simplicity, this calculator estimates P&I as a portion of that, often around 25-28% of gross monthly income for P&I alone.
// Let's use 28% of gross monthly income as the target for P&I for a more aggressive affordability estimate.
// A more conservative approach might use 25% or factor in taxes/insurance/PMI separately.
var maxPIMonthly = grossMonthlyIncome * 0.28; // Max Principal & Interest payment
// Subtract existing debts to find the maximum affordable P&I payment
var affordablePIMonthly = maxPIMonthly – monthlyDebt;
if (affordablePIMonthly <= 0) {
resultDisplay.innerHTML = "$0";
return;
}
// The result is the affordable P&I payment, not the loan amount or total house price.
// This is often what potential buyers want to know first.
var formattedResult = affordablePIMonthly.toLocaleString('en-US', { style: 'currency', currency: 'USD', minimumFractionDigits: 0, maximumFractionDigits: 0 });
resultDisplay.innerHTML = formattedResult;
}