This calculator helps you estimate how much you can afford to borrow for a mortgage, based on your income, debts, and desired down payment. Understanding your affordability is a crucial first step in the home-buying process.
.calculator-container {
font-family: sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 500px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-container h2 {
text-align: center;
margin-bottom: 15px;
color: #333;
}
.calculator-container p {
text-align: center;
margin-bottom: 20px;
color: #555;
line-height: 1.5;
}
.input-section label {
display: block;
margin-bottom: 5px;
font-weight: bold;
color: #444;
}
.input-section input[type="number"] {
width: calc(100% – 20px);
padding: 10px;
margin-bottom: 15px;
border: 1px solid #ccc;
border-radius: 4px;
box-sizing: border-box;
}
.calculator-container button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 16px;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-container button:hover {
background-color: #0056b3;
}
#result {
margin-top: 20px;
padding: 15px;
background-color: #e9ecef;
border: 1px solid #ddd;
border-radius: 4px;
text-align: center;
font-size: 1.1em;
color: #333;
}
#result p {
margin: 5px 0;
}
#result span {
font-weight: bold;
color: #28a745;
}
function calculateMortgageAffordability() {
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");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(annualIncome) || annualIncome <= 0 ||
isNaN(monthlyDebt) || monthlyDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTerm) || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// General affordability rule of thumb: Debt-to-Income ratio (DTI)
// Lenders often look at two ratios:
// 1. Front-end ratio (housing expenses only): typically no more than 28% of gross monthly income
// 2. Back-end ratio (housing expenses + all other debts): typically no more than 36% of gross monthly income
// We'll use the back-end ratio as a primary driver for affordability in this calculator.
var grossMonthlyIncome = annualIncome / 12;
var maxTotalMonthlyDebtAllowed = grossMonthlyIncome * 0.36; // 36% DTI
var maxMonthlyMortgagePayment = maxTotalMonthlyDebtAllowed – monthlyDebt;
if (maxMonthlyMortgagePayment <= 0) {
resultDiv.innerHTML = "Based on your current debts and income, your maximum affordable monthly mortgage payment is $0. You may want to reduce your debt or increase your income.";
return;
}
// Calculate maximum loan amount based on max monthly mortgage payment
// Using the mortgage payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where:
// M = Monthly Payment (maxMonthlyMortgagePayment)
// P = Principal Loan Amount (what we want to find)
// i = monthly interest rate (interestRate / 100 / 12)
// n = total number of payments (loanTerm * 12)
var monthlyInterestRate = interestRate / 100 / 12;
var numberOfPayments = loanTerm * 12;
// Rearranging the formula to solve for P:
// P = M * [ (1 + i)^n – 1] / [ i(1 + i)^n ]
var numerator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var maxLoanAmount = maxMonthlyMortgagePayment * (numerator / denominator);
// Ensure loan amount is not negative due to potential edge cases or very high debt
if (maxLoanAmount < 0) {
maxLoanAmount = 0;
}
// Total affordability is the max loan amount plus the down payment
var totalAffordability = maxLoanAmount + downPayment;
resultDiv.innerHTML = "Estimated Maximum Affordable Loan Amount: $" + maxLoanAmount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "" +
"Estimated Maximum Home Purchase Price (including down payment): $" + totalAffordability.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "" +
"Estimated Maximum Monthly Mortgage Payment (Principal & Interest): $" + maxMonthlyMortgagePayment.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "";
}
Understanding Mortgage Affordability
When you're looking to buy a home, one of the first questions you'll ask is, "How much house can I afford?" This Mortgage Affordability Calculator is designed to give you a realistic estimate. It's based on common lending guidelines that lenders use to assess risk and determine how much they're willing to lend you.
Key Factors in Affordability:
Annual Household Income: This is the most significant factor. Lenders want to see that you have a stable and sufficient income to cover loan payments.
Total Monthly Debt Payments: This includes all your existing recurring monthly financial obligations outside of housing, such as student loans, car payments, personal loans, and minimum credit card payments. High existing debt reduces the amount you can borrow for a mortgage.
Down Payment: A larger down payment reduces the loan amount needed, which can significantly increase your affordability and potentially secure you a better interest rate.
Interest Rate: Even a small change in the interest rate can have a substantial impact on your monthly payment and the total interest paid over the life of the loan.
Loan Term: The length of the loan (e.g., 15, 30 years) affects your monthly payment. Longer terms mean lower monthly payments but more interest paid overall.
How the Calculator Works:
This calculator primarily uses the Debt-to-Income (DTI) ratio. Lenders commonly use two DTI ratios:
Front-end ratio: This compares your estimated monthly housing expenses (principal, interest, taxes, insurance – PITI) to your gross monthly income. A common guideline is that PITI should not exceed 28% of your gross monthly income.
Back-end ratio: This compares your total monthly debt obligations (PITI plus all other monthly debt payments) to your gross monthly income. Lenders often prefer this to be no more than 36% of your gross monthly income.
Our calculator focuses on the back-end ratio to determine the maximum monthly mortgage payment you can afford after covering your existing debts. It then uses this maximum payment, the interest rate, and the loan term to calculate the maximum loan amount you could potentially qualify for. Your total affordability is then estimated by adding your down payment to this maximum loan amount.
Important Considerations:
PITI: This calculator estimates affordability based on Principal & Interest (P&I). You must also factor in property taxes, homeowners insurance, and potentially Private Mortgage Insurance (PMI) or Homeowners Association (HOA) fees, which will increase your actual total monthly housing cost.
Lender Specifics: This is an estimate. Actual loan approval depends on a lender's specific underwriting criteria, your credit score, employment history, and other financial factors.
Closing Costs: Remember to budget for closing costs, which can add several thousand dollars to the upfront expense of buying a home.
Use this calculator as a starting point to understand your borrowing potential. It's always recommended to speak with a mortgage lender or financial advisor for personalized advice.