Use this calculator to estimate how much house you can afford based on your income, debts, and desired loan terms.
.calculator-container {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
background-color: #f9f9f9;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(2, 1fr);
gap: 15px;
margin-bottom: 20px;
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 5px;
font-weight: bold;
}
.input-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
box-sizing: border-box; /* Ensure padding doesn't affect width */
}
.calculator-container button {
background-color: #4CAF50;
color: white;
padding: 12px 20px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 16px;
width: 100%;
margin-bottom: 20px;
}
.calculator-container button:hover {
background-color: #45a049;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
border: 1px solid #e0e0e0;
border-radius: 4px;
background-color: #eef;
text-align: center;
font-size: 1.1em;
}
.calculator-result strong {
color: #333;
}
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 resultElement = document.getElementById("result");
resultElement.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) ||
annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTerm <= 0) {
resultElement.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// DTI ratios are commonly used. Let's assume a maximum DTI of 36% for PITI and 43% including all debt.
var maxPITI_percentage = 0.36; // Percentage of gross monthly income for Principal, Interest, Taxes, Insurance
var maxTotalDebt_percentage = 0.43; // Percentage of gross monthly income for PITI + all other debts
var grossMonthlyIncome = annualIncome / 12;
// Calculate maximum allowed total monthly housing payment (PITI)
var maxPITI = grossMonthlyIncome * maxPITI_percentage;
// Calculate maximum allowed monthly debt payments (including PITI)
var maxTotalMonthlyDebt = grossMonthlyIncome * maxTotalDebt_percentage;
// Calculate maximum allowed PITI based on existing debts
var maxPITI_basedOnDebt = maxTotalMonthlyDebt – monthlyDebt;
// The actual maximum PITI is the lower of the two
var affordablePITI = Math.min(maxPITI, maxPITI_basedOnDebt);
if (affordablePITI <= 0) {
resultElement.innerHTML = "Based on your income and debts, your affordable monthly housing payment is $0. You may need to reduce debt or increase income.";
return;
}
// Mortgage Affordability Calculation (reverse P&I calculation)
// P = L * [c(1 + c)^n] / [(1 + c)^n – 1]
// Where:
// P = Monthly Payment (affordablePITI, excluding T&I for now)
// L = Loan Amount
// c = monthly interest rate (annualRate / 12)
// n = total number of payments (loanTermYears * 12)
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
// We need to estimate the P&I portion of the affordablePITI.
// A common estimation is that Taxes & Insurance (TI) make up 1-2% of the home value annually, or roughly 0.1% to 0.2% of the loan amount monthly.
// For simplicity, let's assume P&I is roughly 80% of the PITI. This is a simplification and can vary significantly.
var estimatedPI = affordablePITI * 0.80; // Assuming 20% for Taxes and Insurance
if (estimatedPI 0) {
loanAmount = estimatedPI * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else { // Handle case of 0% interest rate, though unlikely for mortgages
loanAmount = estimatedPI * numberOfPayments;
}
var maxHomePrice = loanAmount + downPayment;
resultElement.innerHTML = "Based on your inputs:" +
"Gross Monthly Income: $" + grossMonthlyIncome.toFixed(2) + "" +
"Max Affordable PITI (Principal, Interest, Taxes, Insurance): $" + affordablePITI.toFixed(2) + "" +
"Estimated Loan Amount You Could Qualify For: $" + loanAmount.toFixed(2) + "" +
"Estimated Maximum Home Price You Could Afford: $" + maxHomePrice.toFixed(2) + "" +
"Note: This is an estimate. Actual loan approval depends on lender policies, credit score, property taxes, insurance costs, and other factors.";
}
Understanding Mortgage Affordability
Buying a home is a significant financial decision, and understanding how much you can realistically afford is the crucial first step. A mortgage affordability calculator helps you estimate your potential borrowing power by considering several key financial metrics. This goes beyond just looking at the monthly payment; it assesses your overall financial health in relation to taking on a large debt like a home loan.
Key Factors in Mortgage Affordability
Annual Gross Income: This is your total income before taxes and other deductions. Lenders use this as the primary indicator of your ability to repay a loan.
Total Monthly Debt Payments: This includes all your recurring monthly obligations such as car loans, student loans, personal loans, and credit card minimum payments. It *excludes* your current rent or any potential mortgage payment, as that's what the calculator is trying to determine.
Down Payment: The amount of cash you plan to put towards the purchase price of the home. A larger down payment reduces the loan amount needed, making the mortgage more affordable and potentially securing better loan terms.
Interest Rate: The annual interest rate you expect to pay on the mortgage. Even a small difference in interest rates can significantly impact your monthly payment and the total interest paid over the life of the loan.
Loan Term: The duration of the mortgage, typically 15, 20, or 30 years. Longer terms mean lower monthly payments but more interest paid overall. Shorter terms have higher monthly payments but less interest paid over time.
How the Calculator Works (Debt-to-Income Ratio – DTI)
Mortgage affordability calculators primarily rely on the Debt-to-Income (DTI) ratio. Lenders use DTI to gauge your ability to manage monthly payments and repay debts. There are generally two DTI ratios lenders consider:
Front-End Ratio (Housing Ratio): This compares your potential total monthly housing payment (Principal, Interest, Taxes, and 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 (Total Debt Ratio): This compares your total monthly debt payments (including PITI) to your gross monthly income. Lenders typically want this ratio to be no higher than 36% to 43%, although this can vary by loan program and lender.
Our calculator uses these principles. It first determines your gross monthly income and then calculates the maximum monthly housing payment (PITI) you can afford based on the lender's DTI guidelines. It also ensures that your total monthly debt (including the estimated PITI) doesn't exceed the acceptable back-end DTI. Once the affordable PITI is established, the calculator works backward to estimate the loan amount you could qualify for, factoring in your down payment to arrive at an estimated maximum home price.
Example Scenario
Let's say you have:
Annual Gross Income: $90,000
Total Monthly Debt Payments (car, student loans): $600
Down Payment: $30,000
Estimated Annual Interest Rate: 7%
Loan Term: 30 years
Calculation Breakdown:
Gross Monthly Income = $90,000 / 12 = $7,500
Assuming a 36% front-end DTI and 43% back-end DTI:
Maximum allowed PITI (based on front-end) = $7,500 * 0.36 = $2,700
Maximum allowed total monthly debt (back-end) = $7,500 * 0.43 = $3,225
Maximum affordable PITI (considering existing debt) = $3,225 – $600 = $2,625
The more conservative PITI limit is $2,625.
Estimating P&I is 80% of PITI: $2,625 * 0.80 = $2,100 (estimated monthly P&I payment)
Using a mortgage formula, an estimated P&I of $2,100 per month on a 30-year loan at 7% interest supports a loan amount of approximately $314,000.
Estimated Maximum Home Price = Loan Amount + Down Payment = $314,000 + $30,000 = $344,000
Therefore, in this scenario, you might be able to afford a home priced around $344,000. Remember, this is an estimate. Factors like property taxes, homeowner's insurance premiums, and your creditworthiness will influence the final loan amount and your actual purchasing power.
Important Considerations
This calculator provides a helpful estimate, but it's not a loan guarantee. Always consult with a mortgage lender to get pre-approved for a mortgage. They will conduct a thorough review of your financial situation, credit history, and the specific property you intend to purchase to provide an accurate figure.