Mortgage Affordability Calculator
Buying a home is one of the biggest financial decisions you'll make. Understanding how much mortgage you can afford is crucial before you start house hunting. This mortgage affordability calculator will help you estimate your potential borrowing capacity based on key financial factors.
How it works: This calculator uses a common rule of thumb for mortgage affordability, often referred to as the "28/36 rule." This guideline suggests that your total housing costs (including mortgage principal and interest, property taxes, and homeowner's insurance) should not exceed 28% of your gross monthly income, and your total debt obligations (including housing costs and other loans like car payments and credit cards) should not exceed 36% of your gross monthly income.
Factors to consider:
- Gross Monthly Income: This is your income before taxes and other deductions.
- Existing Monthly Debt Payments: Include minimum payments for credit cards, student loans, car loans, personal loans, and any other recurring debts.
- Down Payment: The amount of money you plan to pay upfront. A larger down payment reduces the loan amount needed and can improve your borrowing power.
- Estimated Annual Property Taxes: Taxes levied by your local government based on the value of your property.
- Estimated Annual Homeowner's Insurance: The cost of insuring your home against damage or loss.
- Estimated Annual Private Mortgage Insurance (PMI): If your down payment is less than 20%, you'll likely need to pay PMI, an insurance policy that protects the lender.
- Estimated Interest Rate: The annual interest rate on the mortgage loan. This can fluctuate based on market conditions and your creditworthiness.
- Loan Term: The length of the mortgage, typically 15 or 30 years.
Using this calculator can give you a realistic starting point for your home-buying journey. Remember, this is an estimate, and your actual loan approval will depend on a lender's detailed assessment of your financial situation.
function calculateMortgageAffordability() { var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value); var existingMonthlyDebt = parseFloat(document.getElementById("existingMonthlyDebt").value); var downPayment = parseFloat(document.getElementById("downPayment").value); var annualPropertyTaxes = parseFloat(document.getElementById("annualPropertyTaxes").value); var annualHomeownersInsurance = parseFloat(document.getElementById("annualHomeownersInsurance").value); var annualPMI = parseFloat(document.getElementById("annualPMI").value); var interestRate = parseFloat(document.getElementById("interestRate").value); var loanTermYears = parseInt(document.getElementById("loanTermYears").value); var resultDiv = document.getElementById("mortgageAffordabilityResult"); resultDiv.innerHTML = ""; // Clear previous results if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0 || isNaN(existingMonthlyDebt) || existingMonthlyDebt < 0 || isNaN(downPayment) || downPayment < 0 || isNaN(annualPropertyTaxes) || annualPropertyTaxes < 0 || isNaN(annualHomeownersInsurance) || annualHomeownersInsurance < 0 || isNaN(annualPMI) || annualPMI < 0 || isNaN(interestRate) || interestRate <= 0 || isNaN(loanTermYears) || loanTermYears maxTotalDebt_36percent) { resultDiv.innerHTML = "Based on your existing debt, you may not qualify for additional mortgage. Your current debt obligations exceed 36% of your gross monthly income."; return; } // Calculate available amount for mortgage principal and interest (P&I) var availableForPI = maxPITI_28percent; // Subtract other monthly housing costs from PITI var monthlyPropertyTaxes = annualPropertyTaxes / 12; var monthlyHomeownersInsurance = annualHomeownersInsurance / 12; var monthlyPMI = annualPMI / 12; var monthlyPI = availableForPI – monthlyPropertyTaxes – monthlyHomeownersInsurance – monthlyPMI; if (monthlyPI 0) { maxLoanAmount = monthlyPI * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate; } else { // Handle 0% interest rate case maxLoanAmount = monthlyPI * numberOfPayments; } var affordableHomePrice = maxLoanAmount + downPayment; var htmlOutput = "