Buying a home is a significant financial decision, and understanding how much you can realistically afford is crucial.
A mortgage affordability calculator helps you estimate the maximum loan amount you might qualify for based on your income,
debts, and down payment. This tool considers factors like your gross monthly income, existing monthly debt payments,
and the desired down payment percentage to provide an estimated maximum mortgage payment and, subsequently,
an approximate loan amount.
How it Works:
The calculator typically uses a Debt-to-Income (DTI) ratio to assess affordability. Lenders often have DTI limits,
meaning the percentage of your gross monthly income that goes towards debt payments (including your potential mortgage)
should not exceed a certain threshold. A common guideline is a front-end DTI (housing costs only) of around 28% and
a back-end DTI (all debt) of around 36%, though these can vary.
Key Factors:
Gross Monthly Income: Your total income before taxes and deductions.
Monthly Debt Payments: All recurring monthly debt obligations, such as credit card minimum payments,
car loans, student loans, and personal loans.
Down Payment: The amount of money you pay upfront. A larger down payment reduces the loan amount needed
and can improve your loan terms.
Estimated Interest Rate: The annual interest rate you expect to pay on the mortgage.
Loan Term: The duration of the mortgage, typically 15 or 30 years.
Using this calculator will give you a preliminary estimate. It's important to consult with a mortgage lender for a precise
pre-approval and to understand all the costs associated with homeownership, including property taxes, homeowners insurance,
and potential private mortgage insurance (PMI).
Mortgage Affordability Calculator
15 Years
30 Years
function calculateMortgageAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var totalMonthlyDebt = parseFloat(document.getElementById("totalMonthlyDebt").value);
var downPaymentAmount = parseFloat(document.getElementById("downPaymentAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0) {
resultDiv.innerHTML = "Please enter a valid Gross Monthly Income.";
return;
}
if (isNaN(totalMonthlyDebt) || totalMonthlyDebt < 0) {
resultDiv.innerHTML = "Please enter a valid Total Monthly Debt Payments.";
return;
}
if (isNaN(downPaymentAmount) || downPaymentAmount < 0) {
resultDiv.innerHTML = "Please enter a valid Down Payment Amount.";
return;
}
if (isNaN(interestRate) || interestRate = 20) {
resultDiv.innerHTML = "Please enter a valid Annual Interest Rate (e.g., 3.5 to 7).";
return;
}
if (isNaN(loanTermYears) || (loanTermYears !== 15 && loanTermYears !== 30)) {
resultDiv.innerHTML = "Please select a valid Loan Term.";
return;
}
// Standard DTI ratios (can be adjusted based on lender guidelines)
var maxHousingDTI = 0.28; // Front-end ratio: housing costs / gross income
var maxTotalDTI = 0.36; // Back-end ratio: total debt / gross income
var maxMonthlyHousingPayment = grossMonthlyIncome * maxHousingDTI;
var maxTotalMonthlyDebtAllowed = grossMonthlyIncome * maxTotalDTI;
// Calculate the maximum P&I (Principal & Interest) payment allowed
// This is the max housing payment minus taxes and insurance, which we don't have inputs for,
// so we'll assume housing payment = P&I for a simplified estimate.
// A more complex calculator would ask for estimated property tax and insurance.
var maxPrincipalAndInterestPayment = maxMonthlyHousingPayment – (0); // Placeholder for taxes/insurance
if (maxPrincipalAndInterestPayment 0) {
maxLoanAmount = maxPrincipalAndInterestPayment * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else { // Handle 0% interest rate edge case (though unlikely for mortgages)
maxLoanAmount = maxPrincipalAndInterestPayment * numberOfPayments;
}
// Recalculate total debt including estimated mortgage payment to check against total DTI
// This is a check to ensure the estimated loan doesn't push total DTI too high
// We need to estimate the P&I for this check.
var estimatedMortgagePI = maxPrincipalAndInterestPayment; // Using max P&I as an estimate
var totalDebtWithMortgageEstimate = totalMonthlyDebt + estimatedMortgagePI;
if (totalDebtWithMortgageEstimate > maxTotalMonthlyDebtAllowed) {
// If the estimated P&I pushes total DTI too high, we need to reduce the P&I payment.
// This implies a lower loan amount than initially calculated based on front-end DTI.
// For simplicity, we'll just indicate this constraint. A more advanced calculator would re-calculate.
var adjustedMaxPrincipalAndInterestPayment = maxTotalMonthlyDebtAllowed – totalMonthlyDebt;
if (adjustedMaxPrincipalAndInterestPayment 0) {
maxLoanAmount = adjustedMaxPrincipalAndInterestPayment * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else {
maxLoanAmount = adjustedMaxPrincipalAndInterestPayment * numberOfPayments;
}
}
var estimatedMaxMortgage = maxLoanAmount – downPaymentAmount;
if (estimatedMaxMortgage < 0) estimatedMaxMortgage = 0;
var formattedMaxMortgage = estimatedMaxMortgage.toLocaleString(undefined, {
style: 'currency',
currency: 'USD'
});
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString(undefined, {
style: 'currency',
currency: 'USD'
});
var formattedMaxMonthlyHousingPayment = maxMonthlyHousingPayment.toLocaleString(undefined, {
style: 'currency',
currency: 'USD'
});
resultDiv.innerHTML =
"Estimated Maximum Monthly Housing Payment (P&I, Taxes, Insurance): " + formattedMaxMonthlyHousingPayment + "" +
"Estimated Maximum Loan Amount (based on P&I): " + formattedMaxLoanAmount + "" +
"Estimated Maximum Affordable Mortgage (Loan Amount – Down Payment): " + formattedMaxMortgage + "";
}