This calculator helps you estimate how much you can afford to borrow for a mortgage based on your income, debts, and desired monthly payment. Understanding your affordability is a crucial first step in the home-buying process.
Understanding Mortgage Affordability
The amount you can afford to borrow for a mortgage depends on several factors, primarily your income, existing debts, and the terms of the loan. Lenders often use debt-to-income ratios (DTI) to assess your ability to repay a loan. A common guideline is that your total monthly debt payments (including your potential mortgage) should not exceed 43% of your gross monthly income.
This calculator provides an estimate based on your inputs. It helps you understand the maximum loan amount you might qualify for, considering a desired monthly payment and loan terms. Remember that this is a simplified calculation. Actual loan approval will depend on a lender's specific criteria, including your credit score, employment history, property appraisal, and other financial details.
Key Factors:
Annual Gross Income: Your total income before taxes.
Monthly Debt Payments: This includes car loans, student loans, credit card minimum payments, and any other recurring debts you have.
Down Payment: The amount of money you pay upfront towards the purchase price of the home. A larger down payment reduces the loan amount needed.
Interest Rate: The annual percentage rate charged by the lender. Lower rates generally mean lower 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.
Desired Maximum Monthly Payment: The upper limit you are comfortable spending on your principal and interest payment each month. This is a crucial personal budgeting factor.
By adjusting these variables, you can get a clearer picture of your borrowing power and start your home-buying journey with more confidence.
function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebtPayments = parseFloat(document.getElementById("monthlyDebtPayments").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value) / 100; // Convert to decimal
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var desiredMonthlyPayment = parseFloat(document.getElementById("desiredMonthlyPayment").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || annualIncome <= 0 ||
isNaN(monthlyDebtPayments) || monthlyDebtPayments < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTermYears) || loanTermYears <= 0 ||
isNaN(desiredMonthlyPayment) || desiredMonthlyPayment 0) {
// Ensure we don't divide by zero if interest rate is effectively zero or very close
if (monthlyInterestRate > 0) {
var numerator = Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths);
if (denominator > 0) {
maxLoanAmountFromDesiredPayment = desiredMonthlyPayment * (numerator / denominator);
} else {
maxLoanAmountFromDesiredPayment = desiredMonthlyPayment * loanTermMonths; // Approximation for near-zero rate
}
} else {
maxLoanAmountFromDesiredPayment = desiredMonthlyPayment * loanTermMonths;
}
}
// Now we need to consider the DTI limit.
// Total monthly debt = monthlyDebtPayments (existing) + proposed mortgage payment
// Total monthly debt <= grossMonthlyIncome * 0.43
// proposed mortgage payment <= (grossMonthlyIncome * 0.43) – monthlyDebtPayments
var maxMonthlyPaymentAllowedByDTI = maxPaymentAllowedByDTI – monthlyDebtPayments;
// Ensure the DTI calculation doesn't result in a negative allowable payment
if (maxMonthlyPaymentAllowedByDTI 0) {
if (monthlyInterestRate > 0) {
var numerator = Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths);
if (denominator > 0) {
maxLoanAmountFromDTI = maxMonthlyPaymentAllowedByDTI * (numerator / denominator);
} else {
maxLoanAmountFromDTI = maxMonthlyPaymentAllowedByDTI * loanTermMonths;
}
} else {
maxLoanAmountFromDTI = maxMonthlyPaymentAllowedByDTI * loanTermMonths;
}
}
// The actual maximum loan amount is the lesser of the two calculations
var estimatedMaxLoanAmount = Math.min(maxLoanAmountFromDesiredPayment, maxLoanAmountFromDTI);
// The maximum purchase price is the loan amount plus the down payment
var estimatedMaxPurchasePrice = estimatedMaxLoanAmount + downPayment;
var maxTotalMonthlyDebt = (estimatedMaxLoanAmount / (loanTermMonths)) + monthlyDebtPayments; // Approximate P&I for DTI check
var totalDebtToIncomeRatio = (maxTotalMonthlyDebt / grossMonthlyIncome) * 100;
if (estimatedMaxPurchasePrice > 0) {
resultDiv.innerHTML =
"Estimated Maximum Loan Amount: $" + estimatedMaxLoanAmount.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",") + "" +
"Estimated Maximum Purchase Price (Loan + Down Payment): $" + estimatedMaxPurchasePrice.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",") + "" +
"Based on your inputs, your estimated Debt-to-Income ratio would be approximately: " + totalDebtToIncomeRatio.toFixed(2) + "%" +
"Note: This is an estimate. Actual loan amounts and approval depend on lender underwriting, credit score, and other factors. Property taxes, homeowner's insurance, and HOA fees (PITI) are not included in the monthly payment calculation.";
} else {
resultDiv.innerHTML = "Based on your inputs, the estimated maximum loan amount is $0. You may need to adjust your desired monthly payment or reduce existing debt.";
}
}
.calculator-container {
font-family: Arial, sans-serif;
max-width: 700px;
margin: 20px auto;
padding: 25px;
border: 1px solid #ddd;
border-radius: 8px;
box-shadow: 0 2px 5px rgba(0,0,0,0.1);
background-color: #f9f9f9;
}
.calculator-title {
text-align: center;
color: #333;
margin-bottom: 15px;
}
.calculator-description {
text-align: center;
color: #555;
margin-bottom: 25px;
line-height: 1.6;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(auto-fit, minmax(250px, 1fr));
gap: 20px;
margin-bottom: 25px;
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 8px;
font-weight: bold;
color: #444;
}
.input-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1rem;
transition: border-color 0.3s ease;
}
.input-group input:focus {
border-color: #007bff;
outline: none;
}
.calculator-button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 5px;
font-size: 1.1rem;
cursor: pointer;
transition: background-color 0.3s ease;
margin-bottom: 25px;
}
.calculator-button:hover {
background-color: #0056b3;
}
.calculator-result {
background-color: #e9ecef;
border: 1px solid #ced4da;
border-radius: 5px;
padding: 15px;
margin-top: 20px;
text-align: center;
font-size: 1.1rem;
color: #333;
}
.calculator-result p {
margin-bottom: 10px;
}
.calculator-result strong {
color: #007bff;
}
.calculator-explanation {
margin-top: 30px;
padding-top: 20px;
border-top: 1px solid #eee;
color: #666;
font-size: 0.95rem;
line-height: 1.7;
}
.calculator-explanation h3, .calculator-explanation h4 {
color: #333;
margin-bottom: 10px;
}
.calculator-explanation ul {
padding-left: 20px;
margin-top: 10px;
}
.calculator-explanation li {
margin-bottom: 8px;
}