Determining how much house you can afford is a crucial step in the home-buying process. This Mortgage Affordability Calculator helps you estimate your potential borrowing power by considering your income, existing debts, down payment, and market interest rates.
How it Works:
Lenders typically use a debt-to-income (DTI) ratio to assess affordability. Two common DTI benchmarks are 28% and 36%.
Front-end DTI (Housing Ratio): This ratio compares your potential total housing costs (principal, interest, taxes, and insurance – PITI) to your gross monthly income. A common guideline is that PITI should not exceed 28% of your gross monthly income.
Back-end DTI (Total Debt Ratio): This ratio compares your total monthly debt obligations (including PITI and all other debts like car loans, student loans, and credit card payments) to your gross monthly income. A common guideline is that this ratio should not exceed 36% of your gross monthly income.
Our calculator estimates the maximum monthly mortgage payment you could afford based on these ratios and then works backward to estimate the maximum loan amount you could qualify for, given your down payment and loan terms.
Factors to Consider:
Gross Monthly Income: This is your total income before taxes and other deductions.
Existing Monthly Debt: Include all recurring monthly payments for loans, credit cards, etc.
Down Payment: The amount you'll pay upfront in cash. A larger down payment reduces the loan amount needed.
Interest Rate: This significantly impacts your monthly payment. Rates fluctuate based on market conditions and your creditworthiness.
Loan Term: The length of time you have to repay the loan (e.g., 15 or 30 years). Shorter terms mean higher monthly payments but less interest paid over time.
Property Taxes and Homeowners Insurance: These are often included in your monthly mortgage payment (PITI) and can vary significantly by location. Our calculator uses a simplified approach; actual PITI may differ.
Private Mortgage Insurance (PMI): If your down payment is less than 20%, you'll likely need to pay PMI, which adds to your monthly housing cost.
Disclaimer: This calculator provides an estimate for informational purposes only. It does not constitute financial advice. Your actual borrowing capacity may differ based on lender-specific criteria, credit score, market conditions, and a full underwriting process.
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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 resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(annualIncome) || annualIncome <= 0 ||
isNaN(monthlyDebt) || monthlyDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTerm) || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var grossMonthlyIncome = annualIncome / 12;
// Calculate maximum affordable PITI based on 28% front-end DTI
var maxPiti28 = grossMonthlyIncome * 0.28;
// Calculate maximum affordable total debt based on 36% back-end DTI
var maxTotalDebt36 = grossMonthlyIncome * 0.36;
// Maximum allowed monthly mortgage payment (PITI) based on back-end DTI
// Subtract existing monthly debts from the total allowed debt
var maxMortgagePaymentAllowedBy36 = maxTotalDebt36 – monthlyDebt;
// The actual maximum PITI we can target is the lower of the two limits
var targetMaxPiti = Math.min(maxPiti28, maxMortgagePaymentAllowedBy36);
if (targetMaxPiti Loan Amount * 0.001 monthly.
// Let's assume targetMaxPiti is PITI.
// targetMaxPiti = P&I + T&I
// Let's assume T&I is 0.1% of the Loan Amount + Down Payment. This is still complex.
// **Simplified Approach**: Assume the targetMaxPiti is *primarily* for Principal and Interest,
// and we'll calculate the max loan based on that, and state that T&I must fit within this.
// Or, more accurately, estimate T&I as a percentage of income and subtract from targetMaxPiti.
// Let's assume monthly T&I is ~0.1% of the *gross monthly income* as a rough proxy.
var estimatedMonthlyTandI = grossMonthlyIncome * 0.001; // Rough estimate
var maxPirateForPrincipalAndInterest = targetMaxPiti – estimatedMonthlyTandI;
if (maxPirateForPrincipalAndInterest 0) {
maxLoanAmount = maxPirateForPrincipalAndInterest * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / monthlyInterestRate / Math.pow(1 + monthlyInterestRate, numberOfPayments);
} else { // Handle 0% interest rate scenario, though unlikely for mortgages
maxLoanAmount = maxPirateForPrincipalAndInterest * numberOfPayments;
}
// Ensure loan amount isn't negative due to calculations
maxLoanAmount = Math.max(0, maxLoanAmount);
// Total estimated property value affordability
var maxPropertyValue = maxLoanAmount + downPayment;
// Display results
var formattedMaxLoan = maxLoanAmount.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxPropertyValue = maxPropertyValue.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedTargetMaxPiti = targetMaxPiti.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxPirateForPrincipalAndInterest = maxPirateForPrincipalAndInterest.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedEstimatedMonthlyTandI = estimatedMonthlyTandI.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
resultDiv.innerHTML =
"Estimated Max. Affordable Loan Amount: " + formattedMaxLoan + "" +
"Estimated Max. Property Value: " + formattedMaxPropertyValue + "" +
"(Based on max monthly PITI of " + formattedTargetMaxPiti + ")" +
"(Includes estimated monthly T&I of " + formattedEstimatedMonthlyTandI + ")" +
"(Max P&I payment considered: " + formattedMaxPirateForPrincipalAndInterest + ")";
}