This calculator helps you estimate how much house you can afford based on your income, debts, and down payment. It's a crucial first step in the home-buying process to understand your potential mortgage payments and ensure they fit comfortably within your budget.
Understanding Mortgage Affordability
Determining how much house you can afford is a complex process, but this calculator simplifies it by considering key financial factors. The lender's Debt-to-Income (DTI) ratio is a primary metric. Generally, lenders prefer a total DTI (including your potential mortgage payment) below 43%, though this can vary. This calculator estimates a maximum affordable monthly payment based on a common lender guideline of 28% of your gross monthly income for housing costs (PITI – Principal, Interest, Taxes, Insurance).
Key Factors Explained:
Annual Income: Your total income before taxes. Lenders use this to gauge your ability to repay a loan.
Total Monthly Debt Payments: This includes existing loan payments (car loans, student loans) and minimum credit card payments. These are subtracted from your income to determine what's left for a mortgage.
Down Payment: The upfront cash you pay towards the purchase price. A larger down payment reduces the loan amount needed and can improve your loan terms.
Estimated Annual Interest Rate: The percentage charged by the lender on the loan. Higher rates mean higher monthly payments.
Loan Term: The number of years you have to repay the loan. Longer terms result in lower monthly payments but more interest paid over time.
This calculator provides an estimate. Your actual affordability may differ based on lender-specific underwriting criteria, closing costs, property taxes, homeowners insurance, and other expenses associated with homeownership.
.calculator-container {
font-family: sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 700px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-container h2 {
text-align: center;
color: #333;
margin-bottom: 20px;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(auto-fit, minmax(250px, 1fr));
gap: 15px;
margin-bottom: 20px;
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 5px;
font-weight: bold;
color: #555;
}
.input-group input[type="number"] {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
}
.calculator-container button {
background-color: #4CAF50;
color: white;
padding: 12px 20px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 16px;
width: 100%;
margin-bottom: 20px;
}
.calculator-container button:hover {
background-color: #45a049;
}
.calculator-result {
background-color: #e7f3fe;
border: 1px solid #2196F3;
padding: 15px;
border-radius: 4px;
font-size: 18px;
text-align: center;
margin-bottom: 20px;
color: #333;
min-height: 50px; /* Ensure it has some height even when empty */
}
.calculator-result strong {
color: #2196F3;
}
.calculator-explanation {
margin-top: 20px;
padding-top: 15px;
border-top: 1px solid #eee;
font-size: 14px;
line-height: 1.6;
color: #666;
}
.calculator-explanation h3 {
color: #333;
margin-bottom: 10px;
}
.calculator-explanation ul {
list-style: disc;
margin-left: 20px;
}
.calculator-explanation li {
margin-bottom: 8px;
}
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 resultDiv = document.getElementById("result");
// Clear previous results and errors
resultDiv.innerHTML = ";
// — Input Validation —
if (isNaN(annualIncome) || annualIncome <= 0) {
resultDiv.innerHTML = 'Please enter a valid annual income.';
return;
}
if (isNaN(monthlyDebt) || monthlyDebt < 0) {
resultDiv.innerHTML = 'Please enter a valid monthly debt amount.';
return;
}
if (isNaN(downPayment) || downPayment < 0) {
resultDiv.innerHTML = 'Please enter a valid down payment amount.';
return;
}
if (isNaN(interestRate) || interestRate 20) {
resultDiv.innerHTML = 'Please enter a valid interest rate (e.g., 5.5).';
return;
}
if (isNaN(loanTerm) || loanTerm 40) {
resultDiv.innerHTML = 'Please enter a valid loan term in years (e.g., 30).';
return;
}
// — Calculations —
// 1. Calculate maximum affordable monthly PITI (Principal, Interest, Taxes, Insurance)
// Common guideline: Housing costs (PITI) should not exceed 28% of gross monthly income
var grossMonthlyIncome = annualIncome / 12;
var maxPitiPayment = grossMonthlyIncome * 0.28;
// 2. Calculate DTI based on existing debts
// Common guideline: Total debt (existing + new PITI) should not exceed 36-43% of gross monthly income
// We'll use 43% as a general upper limit to estimate maximum total monthly payment
var maxTotalMonthlyPayment = grossMonthlyIncome * 0.43;
var maxMortgagePaymentAllowed = maxTotalMonthlyPayment – monthlyDebt;
// Use the more conservative (lower) of the two PITI limits for affordability
var affordablePiti = Math.min(maxPitiPayment, maxMortgagePaymentAllowed);
// If affordable PITI is negative, it means existing debts are too high relative to income
if (affordablePiti 80%.
// PITI = Principal + Interest + Taxes + Insurance
// Affordable PITI = Max Mortgage Payment – (Taxes + Insurance + PMI)
// Iterative approach to find the loan amount that fits the affordable PITI.
// We'll estimate an initial affordable home price and refine.
var estimatedHomePrice = downPayment + 100000; // Start with down payment + a base loan
var maxLoanAmount = 0;
var tolerance = 100; // Tolerance for iterative calculation
var maxIterations = 100;
var currentIteration = 0;
while(currentIteration < maxIterations) {
var estimatedLoanAmount = estimatedHomePrice – downPayment;
if (estimatedLoanAmount 0) {
calculatedMonthlyPrincipalInterest = estimatedLoanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
calculatedMonthlyPrincipalInterest = estimatedLoanAmount / numberOfPayments; // Simple division if interest is 0
}
// Estimate Taxes and Insurance (TI) as a percentage of the *home price* for simplicity
// Let's assume 1.2% annually for property taxes and insurance combined.
var estimatedAnnualTI = estimatedHomePrice * 0.012;
var estimatedMonthlyTI = estimatedAnnualTI / 12;
// Estimate PMI if Loan-to-Value ratio is high (e.g., > 80%)
var loanToValue = (estimatedLoanAmount / estimatedHomePrice) * 100;
var estimatedMonthlyPMI = 0;
if (loanToValue > 80) {
estimatedMonthlyPMI = estimatedLoanAmount * 0.005 / 12; // Assume 0.5% annually
}
var totalEstimatedMonthlyCost = calculatedMonthlyPrincipalInterest + estimatedMonthlyTI + estimatedMonthlyPMI;
if (Math.abs(totalEstimatedMonthlyCost – affordablePiti) affordablePiti) {
// Estimated cost is too high, need to lower the estimated home price
estimatedHomePrice *= (affordablePiti / totalEstimatedMonthlyCost) * 0.95; // Adjust down, with a small buffer
} else {
// Estimated cost is too low, need to increase the estimated home price
estimatedHomePrice *= (affordablePiti / totalEstimatedMonthlyCost) * 1.05; // Adjust up, with a small buffer
}
currentIteration++;
}
// If loop finishes without converging, use the last estimate or indicate issue
if (currentIteration === maxIterations) {
// Fallback: Calculate maximum loan based SOLELY on P&I affordable portion if TI/PMI estimates are problematic
// For simplicity, if iteration fails, we'll present the P&I calculation
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var maxLoanAmountFromPI = 0;
if (monthlyInterestRate > 0) {
maxLoanAmountFromPI = affordablePiti * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else {
maxLoanAmountFromPI = affordablePiti * numberOfPayments;
}
maxLoanAmount = maxLoanAmountFromPI – downPayment; // Loan amount is total price minus down payment
// This fallback might not be perfectly accurate as it ignores TI/PMI in the P&I calculation part
// A better fallback is to report that a precise calculation failed due to complex assumptions.
resultDiv.innerHTML = 'Could not precisely determine affordability due to complex PITI estimates. However, based on your income and debts, your estimated maximum affordable home price might be around $' + (Math.max(0, maxLoanAmount + downPayment)).toFixed(2) + '.';
return;
}
var affordableHomePrice = maxLoanAmount + downPayment;
// — Display Results —
if (affordableHomePrice > downPayment) {
var formattedHomePrice = affordableHomePrice.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 });
resultDiv.innerHTML = 'Your estimated maximum affordable home price is: $' + formattedHomePrice + '';
} else {
resultDiv.innerHTML = 'Based on your income and existing debts, your estimated affordable home price is less than or equal to your down payment. Please adjust your inputs or consult with a mortgage professional.';
}
}