Understanding how much house you can afford is a crucial first step in the home-buying process. The 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 power, enabling you to set a home-buying budget with confidence.
How Mortgage Affordability Works
Lenders assess your ability to repay a mortgage loan by looking at several components of your financial health. Two of the most important metrics they use are:
Debt-to-Income Ratio (DTI): This ratio compares your total monthly debt payments (including your potential mortgage payment, student loans, car loans, credit card minimums, etc.) to your gross monthly income. Lenders typically prefer a DTI of 43% or lower, though some may go higher depending on other factors.
Front-End Ratio (Housing Ratio): This ratio compares your estimated monthly housing costs (principal, interest, taxes, and insurance – often called PITI) to your gross monthly income. Lenders often look for this to be around 28% or lower.
Our calculator considers these factors, along with your down payment, to provide an estimate of your maximum affordable loan amount. Remember, this is an estimate, and your actual loan approval will depend on the specific lender's underwriting criteria, credit score, and other financial details.
Factors Affecting Affordability
Gross Monthly Income: Your total income before taxes and other deductions.
Monthly Debt Payments: All your recurring monthly debt obligations, such as credit card payments, student loans, car loans, and any other loans.
Estimated Monthly Property Taxes: The annual property taxes divided by 12.
Estimated Monthly Homeowners Insurance: The annual homeowners insurance premium divided by 12.
Interest Rate: The estimated annual interest rate on the mortgage loan.
Loan Term: The length of the mortgage, typically 15 or 30 years.
Down Payment: The amount of money you plan to put down upfront.
Maximum DTI Ratio: The highest debt-to-income ratio you are comfortable with or believe a lender might approve (often capped at 43%).
Mortgage Affordability Calculator
Please enter your financial details below:
30 Years
15 Years
function calculateMortgageAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var monthlyDebtPayments = parseFloat(document.getElementById("monthlyDebtPayments").value);
var monthlyPropertyTaxes = parseFloat(document.getElementById("monthlyPropertyTaxes").value);
var monthlyHomeInsurance = parseFloat(document.getElementById("monthlyHomeInsurance").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var maxDti = parseFloat(document.getElementById("maxDti").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0 ||
isNaN(monthlyDebtPayments) || monthlyDebtPayments < 0 ||
isNaN(monthlyPropertyTaxes) || monthlyPropertyTaxes < 0 ||
isNaN(monthlyHomeInsurance) || monthlyHomeInsurance < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTerm) || loanTerm <= 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(maxDti) || maxDti <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
// Calculate maximum total monthly housing payment (PITI) allowed by DTI
var maxTotalHousingPayment = grossMonthlyIncome * (maxDti / 100);
// Subtract other debts and taxes/insurance from the max total housing payment
var maxPiti = maxTotalHousingPayment – monthlyDebtPayments;
var maxMortgagePayment = maxPiti – monthlyPropertyTaxes – monthlyHomeInsurance;
if (maxMortgagePayment 0) {
maxLoanAmount = maxMortgagePayment * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else { // Handle 0% interest rate, though unlikely for mortgages
maxLoanAmount = maxMortgagePayment * numberOfPayments;
}
// Add the down payment to the loan amount to get the estimated maximum home price
var estimatedMaxHomePrice = maxLoanAmount + downPayment;
resultDiv.innerHTML =
"Estimated Maximum Loan Amount: $" + maxLoanAmount.toFixed(2) + "" +
"Estimated Maximum Home Price: $" + estimatedMaxHomePrice.toFixed(2) + "" +
"Note: This is an estimate. Actual loan approval depends on lender criteria, credit score, and other factors.";
}