Mortgage Affordability Calculator
Understanding how much you can afford for a mortgage is a crucial first step in the home-buying process. This calculator helps you estimate your maximum affordable mortgage payment based on your income, debts, and desired down payment.
Several factors influence how much a lender will approve you for, including your debt-to-income ratio (DTI), credit score, and the down payment you're able to make. A lower DTI generally means you're in a better financial position to handle a mortgage. Lenders typically look at two types of DTI:
- Front-end DTI (Housing Ratio): This ratio compares your potential monthly housing expenses (principal, interest, property taxes, and homeowner's insurance – often called PITI) to your gross monthly income. A common guideline is to keep this below 28%.
- Back-end DTI (Total Debt Ratio): This ratio compares all your monthly debt obligations (including your potential PITI, car loans, student loans, credit card payments, etc.) to your gross monthly income. Lenders often prefer this to be below 36%, though some may allow up to 43% or even higher depending on other factors.
The down payment also plays a significant role. A larger down payment reduces the loan amount needed, making the mortgage more affordable and potentially allowing you to avoid private mortgage insurance (PMI) if you put down 20% or more on a conventional loan. Remember to also factor in closing costs, which can add an additional 2% to 5% of the loan amount.
Your Estimated Mortgage Affordability
function calculateMortgageAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var totalMonthlyDebt = parseFloat(document.getElementById("totalMonthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value) / 100;
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var propertyTaxesAnnual = parseFloat(document.getElementById("propertyTaxesAnnual").value);
var homeownersInsuranceAnnual = parseFloat(document.getElementById("homeownersInsuranceAnnual").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0 ||
isNaN(totalMonthlyDebt) || totalMonthlyDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate < 0 ||
isNaN(loanTerm) || loanTerm <= 0 ||
isNaN(propertyTaxesAnnual) || propertyTaxesAnnual < 0 ||
isNaN(homeownersInsuranceAnnual) || homeownersInsuranceAnnual < 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// — DTI Calculations —
// Assuming a maximum front-end DTI of 28% and back-end DTI of 36%
var maxFrontEndDTI = 0.28;
var maxBackEndDTI = 0.36;
var maxHousingPaymentBasedOnFrontEnd = grossMonthlyIncome * maxFrontEndDTI;
var maxTotalDebtPaymentBasedOnBackEnd = grossMonthlyIncome * maxBackEndDTI;
var maxMortgagePaymentAllowedByBackEnd = maxTotalDebtPaymentBasedOnBackEnd – totalMonthlyDebt;
var affordableMonthlyPITI = Math.min(maxHousingPaymentBasedOnFrontEnd, maxMortgagePaymentAllowedByBackEnd);
if (affordableMonthlyPITI <= 0) {
resultDiv.innerHTML = "Based on the inputs, your affordable monthly housing payment is very low or negative. This might be due to your existing debt or income level. You may want to consult with a mortgage professional.";
return;
}
// — Mortgage Payment Calculation (using PITI components) —
var monthlyInterestRate = interestRate / 12;
var numberOfMonths = loanTerm * 12;
var monthlyPropertyTaxes = propertyTaxesAnnual / 12;
var monthlyHomeownersInsurance = homeownersInsuranceAnnual / 12;
// This part calculates the maximum LOAN AMOUNT you can afford
// based on the affordable monthly PITI, and then subtracts the down payment.
// P = L [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Rearranging to solve for L (Loan Amount):
// L = P [ (1 + i)^n – 1] / [ i(1 + i)^n ]
// Calculate the P&I portion of the affordable payment
var affordableMonthlyPrincipalAndInterest = affordableMonthlyPITI – monthlyPropertyTaxes – monthlyHomeownersInsurance;
if (affordableMonthlyPrincipalAndInterest 0) {
var numerator = Math.pow(1 + monthlyInterestRate, numberOfMonths) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfMonths);
if (denominator > 0) {
maxLoanAmount = affordableMonthlyPrincipalAndInterest * (numerator / denominator);
}
} else { // Handle 0% interest rate case (unlikely for mortgages but for completeness)
maxLoanAmount = affordableMonthlyPrincipalAndInterest * numberOfMonths;
}
// Calculate the estimated home price
var estimatedMaxHomePrice = maxLoanAmount + downPayment;
// — Display Results —
var outputHTML = "Estimated Maximum Affordable Home Price:
";
outputHTML += "$" + estimatedMaxHomePrice.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + ""; // Formatted
outputHTML += "Breakdown:
";
outputHTML += "Estimated Maximum Monthly Principal & Interest (P&I): $" + affordableMonthlyPrincipalAndInterest.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "";
outputHTML += "Estimated Monthly Property Taxes: $" + monthlyPropertyTaxes.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "";
outputHTML += "Estimated Monthly Homeowners Insurance: $" + monthlyHomeownersInsurance.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "";
outputHTML += "Total Estimated Monthly Housing Payment (PITI): $" + affordableMonthlyPITI.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "";
outputHTML += "Estimated Maximum Loan Amount: $" + maxLoanAmount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "";
resultDiv.innerHTML = outputHTML;
}
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display: flex;
flex-wrap: wrap;
gap: 30px;
font-family: sans-serif;
margin-top: 20px;
border: 1px solid #e0e0e0;
padding: 20px;
border-radius: 8px;
background-color: #f9f9f9;
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.input-section {
flex: 1;
min-width: 300px;
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.output-section {
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padding: 20px;
border-radius: 5px;
border: 1px solid #d0d0d0;
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.form-group {
display: flex;
flex-direction: column;
margin-bottom: 10px;
}
label {
margin-bottom: 5px;
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color: #333;
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input[type="number"] {
padding: 10px;
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button {
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border: none;
border-radius: 4px;
cursor: pointer;
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transition: background-color 0.3s ease;
margin-top: 15px;
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button:hover {
background-color: #0056b3;
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h2 {
color: #007bff;
margin-bottom: 15px;
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h3 {
color: #555;
margin-top: 10px;
margin-bottom: 5px;
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#result p {
margin-bottom: 8px;
line-height: 1.6;
color: #444;
}
#result strong {
color: #000;
}