Use this calculator to estimate the maximum mortgage you could afford based on your income, debts, and down payment. Understanding your potential borrowing power is the first step towards finding your dream home.
.calculator-container {
font-family: sans-serif;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
max-width: 600px;
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: 25px;
color: #555;
font-size: 0.95em;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(auto-fit, minmax(250px, 1fr));
gap: 15px;
margin-bottom: 20px;
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 5px;
font-weight: bold;
color: #444;
}
.input-group input {
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 1em;
}
.calculator-container button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 1.1em;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 25px;
padding: 15px;
background-color: #e9ecef;
border: 1px solid #ced4da;
border-radius: 4px;
font-size: 1.1em;
text-align: center;
color: #333;
}
.calculator-result strong {
color: #007bff;
}
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;
}
// Standard lending guidelines often suggest a Debt-to-Income (DTI) ratio.
// A common front-end DTI limit is 28% (housing expenses) and back-end DTI is 36% (total debt).
// We'll use these as a basis.
var maxHousingPayment = annualIncome * 0.28 / 12; // Max monthly housing payment (PITI)
var maxTotalDebtPayment = annualIncome * 0.36 / 12; // Max total monthly debt payment
var maxMortgagePayment = maxTotalDebtPayment – monthlyDebt;
// Ensure the maximum mortgage payment derived from the total debt limit is not less than zero.
if (maxMortgagePayment 0 && numberOfPayments > 0) {
maxLoanAmount = affordableMonthlyPIMortgage * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else if (affordableMonthlyPIMortgage > 0) {
// Handle case for 0% interest or 0 term (though validated against)
// For practical purposes, if interest is 0, loan amount is P*n but this is not standard mortgage.
// If rate is 0, technically loan amount can be very large. We assume rate > 0 for formula.
// If term is 0, this is not a loan.
maxLoanAmount = 0;
}
var totalAffordableHomePrice = maxLoanAmount + downPayment;
// Format currency for display
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0
});
if (totalAffordableHomePrice > 0) {
resultDiv.innerHTML = "Estimated Maximum Loan Amount: " + formatter.format(maxLoanAmount) + "" +
"Estimated Maximum Affordable Home Price: " + formatter.format(totalAffordableHomePrice) + "" +
"Note: This is an estimate and does not include property taxes, insurance, or HOA fees. Consult with a mortgage professional.";
} else {
resultDiv.innerHTML = "Based on your inputs, your estimated affordable home price is $0 or negative. Please review your financial details or consult a mortgage professional.";
}
}
Understanding Mortgage Affordability
Determining how much mortgage you can afford is a crucial step in the home-buying process. It helps set realistic expectations and prevents overextending your finances. This calculator provides an estimate based on common lending guidelines, but it's important to understand the factors involved.
Key Factors Influencing Affordability:
Annual Gross Income: This is your total income before taxes. Lenders look at this to gauge your ability to repay the loan.
Monthly Debt Payments: This includes all recurring monthly obligations such as credit card payments, student loans, car loans, and personal loans. It does NOT include your current rent or future mortgage payment, as those are what we're calculating. Lowering existing debt can significantly increase your borrowing power.
Down Payment: The amount of money you pay upfront. A larger down payment reduces the loan amount needed, lowers your monthly payments, and can help you avoid private mortgage insurance (PMI).
Interest Rate: The annual percentage rate charged by the lender. Even a small difference in interest rate can have a substantial impact on your monthly payment and the total interest paid over the life of the loan. Rates are influenced by market conditions, your credit score, and the loan term.
Loan Term: The number of years you have to repay the loan (e.g., 15, 20, or 30 years). Shorter terms mean higher monthly payments but less total interest paid. Longer terms result in lower monthly payments but more interest over time.
How the Calculator Works:
This calculator uses a common guideline: the Debt-to-Income (DTI) ratio. Lenders often look at two DTI ratios:
Front-End DTI (Housing Ratio): Typically, lenders prefer this to be no more than 28% of your gross monthly income. This ratio considers only your potential mortgage payment (Principal, Interest, Taxes, and Insurance – PITI).
Back-End DTI (Total Debt Ratio): This ratio includes your potential mortgage payment PLUS all your other monthly debt obligations. Lenders generally prefer this to be no more than 36% of your gross monthly income.
Our calculator estimates the maximum monthly payment you can afford based on the 36% back-end DTI guideline (after subtracting your existing debts). It then uses this affordable payment, along with the interest rate and loan term you input, to calculate the maximum loan amount you could potentially borrow. Finally, it adds your down payment to estimate the maximum home price you could afford.
Important Considerations:
PITI: This calculator primarily focuses on the Principal and Interest (P&I) portion of your mortgage. Your actual housing payment will also include Property Taxes and Homeowners Insurance (PITI), which can significantly increase your total monthly housing cost.
Credit Score: Your credit score is a major determinant of the interest rate you'll qualify for and your overall loan approval. A higher score typically leads to better rates.
Lender Specifics: Different lenders have varying DTI limits and qualification criteria. This calculator is a general guide.
Closing Costs: Remember to factor in closing costs, which can range from 2% to 5% of the loan amount.
For a precise understanding of your borrowing capacity, it is highly recommended to speak with a mortgage lender or broker. They can provide a pre-approval based on your complete financial profile.