Understanding how much house you can afford is a crucial first step in the home-buying process.
The mortgage affordability calculator helps you estimate your potential borrowing power based on your income,
debts, and down payment. This tool considers several key factors to provide a realistic estimate.
How it Works:
The calculator uses a common rule of thumb for mortgage affordability, often referred to as the "28/36 rule."
This rule suggests that your total housing costs (including mortgage principal and interest, property taxes,
and homeowner's insurance – often called PITI) should not exceed 28% of your gross monthly income.
Additionally, your total debt payments (including PITI, car loans, student loans, and credit card minimums)
should not exceed 36% of your gross monthly income.
Our calculator simplifies this by focusing on the maximum monthly mortgage payment you can afford,
given your income and existing debt. It then works backward to estimate the potential loan amount you could
qualify for, considering an estimated interest rate and loan term.
Factors to Consider:
Gross Monthly Income: This is your income before taxes and other deductions.
Existing Monthly Debt Payments: This includes all recurring debt payments like credit cards, car loans, student loans, and personal loans.
Down Payment: The amount of money you plan to pay upfront towards the purchase price of the home. A larger down payment reduces the loan amount needed and can improve your chances of approval.
Estimated Interest Rate: Mortgage interest rates fluctuate. Using a realistic current rate will provide a more accurate estimate.
Loan Term: The length of the mortgage, typically 15 or 30 years. Shorter terms usually mean higher monthly payments but less interest paid over time.
Property Taxes and Homeowner's Insurance: While not directly input into this simplified calculator, remember that these costs will be added to your monthly mortgage payment (PITI).
This calculator provides an estimate and is not a loan approval. Your actual borrowing capacity will be determined by a lender after a full application and credit check.
Mortgage Affordability Calculator
30 Years
20 Years
15 Years
Your Estimated Affordability:
function calculateMortgageAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var existingMonthlyDebt = parseFloat(document.getElementById("existingMonthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("mortgageResult");
var maxMonthlyPaymentResult = document.getElementById("maxMonthlyPaymentResult");
var maxLoanAmountResult = document.getElementById("maxLoanAmountResult");
var maxHomePriceResult = document.getElementById("maxHomePriceResult");
// Clear previous results
maxMonthlyPaymentResult.textContent = "";
maxLoanAmountResult.textContent = "";
maxHomePriceResult.textContent = "";
// — Input Validation —
if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0) {
alert("Please enter a valid Gross Monthly Income.");
return;
}
if (isNaN(existingMonthlyDebt) || existingMonthlyDebt < 0) {
alert("Please enter a valid Existing Monthly Debt Payments.");
return;
}
if (isNaN(downPayment) || downPayment < 0) {
alert("Please enter a valid Down Payment.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate 20) { // Rate realistically capped
alert("Please enter a valid Estimated Annual Interest Rate.");
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please select a valid Loan Term.");
return;
}
// — Calculations —
// Rule of thumb: Max PITI (Principal, Interest, Taxes, Insurance) is 28% of gross monthly income
var maxPITI = grossMonthlyIncome * 0.28;
// Rule of thumb: Max total debt payments (PITI + existing debt) is 36% of gross monthly income
var maxTotalDebt = grossMonthlyIncome * 0.36;
// The actual maximum monthly mortgage payment (P&I) is limited by both rules.
// It's the smaller of (maxPITI) or (maxTotalDebt – existingMonthlyDebt).
var maxMonthlyMortgagePayment = Math.min(maxPITI, maxTotalDebt – existingMonthlyDebt);
// Ensure max monthly mortgage payment isn't negative if existing debt is too high
if (maxMonthlyMortgagePayment 0) {
// Formula for loan amount from monthly payment: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Rearranged for P (Principal/Loan Amount): P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ]
maxLoanAmount = maxMonthlyMortgagePayment * (Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths));
} else { // Handle 0% interest rate, though unlikely for mortgages
maxLoanAmount = maxMonthlyMortgagePayment * loanTermMonths;
}
// Calculate the maximum home price
var maxHomePrice = maxLoanAmount + downPayment;
// — Display Results —
maxMonthlyPaymentResult.textContent = "Maximum Estimated Monthly Mortgage Payment (P&I): $" + maxMonthlyMortgagePayment.toFixed(2);
maxLoanAmountResult.textContent = "Maximum Estimated Loan Amount: $" + maxLoanAmount.toFixed(2);
maxHomePriceResult.textContent = "Maximum Estimated Home Price (including down payment): $" + maxHomePrice.toFixed(2);
}