Your Estimated Affordability
Enter your details above to see your estimated mortgage affordability.
.calculator-wrapper {
font-family: sans-serif;
display: flex;
flex-wrap: wrap;
gap: 20px;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
background-color: #f9f9f9;
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.calculator-form {
flex: 1;
min-width: 300px;
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.calculator-result {
flex: 1;
min-width: 300px;
background-color: #fff;
padding: 15px;
border-radius: 5px;
border: 1px solid #eee;
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.form-group {
margin-bottom: 15px;
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.form-group label {
display: block;
margin-bottom: 5px;
font-weight: bold;
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.form-group input {
width: calc(100% – 20px);
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
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button {
background-color: #4CAF50;
color: white;
padding: 12px 20px;
border: none;
border-radius: 4px;
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button:hover {
background-color: #45a049;
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#result p {
margin: 0;
font-size: 1.1em;
line-height: 1.5;
}
function calculateAffordability() {
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");
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
// Lender typically uses Debt-to-Income (DTI) ratios. Common thresholds are 28% for housing and 36% for total debt.
// We'll use a conservative approach combining both.
var maxMonthlyHousingPayment = annualIncome / 12 * 0.28; // 28% of gross monthly income for housing
var maxTotalMonthlyPayment = annualIncome / 12 * 0.36; // 36% of gross monthly income for all debts
var maxAllowedMonthlyDebt = maxTotalMonthlyPayment – monthlyDebt;
// Ensure the allowed monthly debt for housing isn't negative or less than what's needed for minimum payments
if (maxAllowedMonthlyDebt < 0) {
resultDiv.innerHTML = "Based on your current debt, you may not qualify for additional housing payments.";
return;
}
// The actual maximum monthly housing payment is the lower of the two limits
var actualMaxMonthlyHousingPayment = Math.min(maxMonthlyHousingPayment, maxAllowedMonthlyDebt);
if (actualMaxMonthlyHousingPayment 0) {
maxLoanAmount = actualMaxMonthlyHousingPayment * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else {
// Handle 0% interest rate case
maxLoanAmount = actualMaxMonthlyHousingPayment * numberOfPayments;
}
var estimatedMaxHomePrice = maxLoanAmount + downPayment;
var formattedMaxHomePrice = estimatedMaxHomePrice.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMonthlyHousingPayment = actualMaxMonthlyHousingPayment.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = "
Estimated Maximum Home Price: " + formattedMaxHomePrice + "" +
"
Estimated Maximum Loan Amount: " + formattedMaxLoanAmount + "" +
"
Estimated Maximum Monthly Housing Payment (Principal & Interest): " + formattedMonthlyHousingPayment + "" +
"Note: This estimate does not include property taxes, homeowner's insurance, or PMI, which will increase your total monthly housing costs.";
}
Understanding Mortgage Affordability
Buying a home is a significant financial milestone, and understanding how much you can realistically afford is the crucial first step. Mortgage affordability calculators are powerful tools that help you estimate the maximum home price you can target, based on a variety of financial factors. This goes beyond just looking at a comfortable monthly payment; it involves assessing your overall financial health and how lenders evaluate your borrowing capacity.
Key Factors in Mortgage Affordability
- Annual Gross Income: This is your income before taxes and other deductions. Lenders use this as a primary indicator of your ability to repay a loan.
- Monthly Debt Payments: This includes all recurring monthly expenses such as car loans, student loans, credit card minimum payments, and other personal loans. It does NOT typically include your current rent, as that will be replaced by a mortgage payment.
- Down Payment: The upfront cash you pay towards the purchase price of the home. A larger down payment reduces the loan amount needed, potentially improving your chances of approval and lowering your monthly payments.
- Interest Rate: The percentage charged by the lender for borrowing money. Even small differences in interest rates can significantly impact your monthly payment and the total cost of the loan over its lifetime.
- Loan Term: The number of years you have to repay the mortgage, commonly 15 or 30 years. Longer terms mean lower monthly payments but more interest paid over time.
How Affordability is Calculated (The 28/36 Rule)
Lenders often use guidelines like the "28/36 rule" to determine how much they are willing to lend. This rule suggests that your total monthly housing expenses (including principal, interest, taxes, and insurance – often called PITI) should not exceed 28% of your gross monthly income. Additionally, all your monthly debt obligations (including the proposed mortgage payment) should not exceed 36% of your gross monthly income.
Our calculator focuses on the principal and interest (P&I) portion of your mortgage payment, allowing you to see the maximum loan amount and home price you might qualify for, assuming you stay within these common debt-to-income (DTI) ratios. Remember that the actual PITI will be higher due to property taxes and homeowner's insurance, which are essential components of homeownership.
Using the Calculator
Simply input your current financial details into the fields provided. The calculator will then estimate the maximum home price you could afford, the maximum loan amount you might need, and the estimated maximum monthly principal and interest payment. This estimate is a guideline to help you start your home search with realistic expectations.
Important Considerations
This calculator provides an estimate. Your actual borrowing capacity may vary based on lender-specific criteria, your credit score, employment history, and prevailing market conditions. It's always advisable to speak with a mortgage professional for a personalized pre-approval.