Use this calculator to estimate how much home you can afford based on your income, debts, and down payment.
.calculator-container {
font-family: sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 600px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(auto-fit, minmax(250px, 1fr));
gap: 15px;
margin-bottom: 20px;
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.input-group {
display: flex;
flex-direction: column;
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.input-group label {
margin-bottom: 5px;
font-weight: bold;
font-size: 0.9em;
color: #333;
}
.input-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
box-sizing: border-box; /* Important for consistent sizing */
}
.calculator-container button {
background-color: #4CAF50;
color: white;
padding: 12px 20px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 1em;
margin-top: 10px;
transition: background-color 0.3s ease;
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.calculator-container button:hover {
background-color: #45a049;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
border: 1px dashed #4CAF50;
background-color: #e8f5e9;
border-radius: 4px;
font-size: 1.1em;
text-align: center;
min-height: 50px; /* Ensure it has some height even when empty */
}
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");
// Clear previous results
resultDiv.innerHTML = "";
// Input validation
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter positive values for income, interest rate, and loan term. Debt and down payment can be zero but not negative.";
return;
}
// Lender typically allows PITI (Principal, Interest, Taxes, Insurance) to be 28-36% of gross monthly income.
// We'll use a common guideline of 36% for this calculation.
var maxPitiRatio = 0.36;
var monthlyIncome = annualIncome / 12;
var maxPiti = monthlyIncome * maxPitiRatio;
// Subtract existing debt payments from maximum PITI to find maximum monthly mortgage payment.
var maxMortgagePayment = maxPiti – monthlyDebt;
if (maxMortgagePayment <= 0) {
resultDiv.innerHTML = "Based on your income and existing debts, you may not qualify for a new mortgage at this time.";
return;
}
// Now we need to calculate the maximum loan amount based on the maxMortgagePayment.
// The formula for a mortgage payment (M) is: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where: P = Principal loan amount, i = monthly interest rate, n = total number of payments.
// We need to rearrange this to solve for P: P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ]
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
// Handle case where interest rate is very low or zero, to avoid division by zero.
var maxLoanAmount;
if (monthlyInterestRate === 0) {
maxLoanAmount = maxMortgagePayment * numberOfPayments;
} else {
var factor = Math.pow(1 + monthlyInterestRate, numberOfPayments);
maxLoanAmount = maxMortgagePayment * (factor – 1) / (monthlyInterestRate * factor);
}
// The total home price you can afford is the maximum loan amount plus your down payment.
var maxHomePrice = maxLoanAmount + downPayment;
// Format the results
var formattedMaxHomePrice = maxHomePrice.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMaxMortgagePayment = maxMortgagePayment.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = "
Estimated Affordability:
" +
"Maximum Home Price You May Afford: " + formattedMaxHomePrice + "" +
"Estimated Maximum Mortgage Loan Amount: " + formattedMaxLoanAmount + "" +
"(Based on a maximum estimated monthly PITI payment of " + formattedMaxMortgagePayment + ", which is " + (maxPitiRatio * 100) + "% of your gross monthly income)";
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial first step in the home-buying process. While lenders will perform their own detailed analysis, a mortgage affordability calculator can give you a good estimate. This calculator considers several key factors:
Annual Gross Income:
This is your total income before taxes and other deductions. Lenders use this figure to gauge your ability to make monthly payments. A higher income generally means you can afford a more expensive home.
Total Monthly Debt Payments:
This includes your minimum payments for credit cards, student loans, car loans, personal loans, and any other recurring debts. Lenders look at your debt-to-income ratio (DTI), which compares your total monthly debt payments (including the potential mortgage payment) to your gross monthly income. Keeping your existing debt low is essential for qualifying for a larger mortgage.
Down Payment Amount:
The down payment is the portion of the home's purchase price you pay upfront in cash. A larger down payment reduces the amount you need to borrow, which can lower your monthly payments and potentially help you avoid private mortgage insurance (PMI) if you put down 20% or more on a conventional loan. It also directly increases the total home price you can afford.
Estimated Annual Interest Rate:
The interest rate on your mortgage significantly impacts your monthly payment and the total cost of the loan over time. Even a small difference in the interest rate can mean thousands of dollars more or less paid over the life of the loan. It's wise to shop around with different lenders to secure the best possible rate.
Loan Term (Years):
This is the length of time you have to repay the mortgage, typically 15 or 30 years. A shorter loan term (like 15 years) will have higher monthly payments but will result in paying less interest overall. A longer loan term (like 30 years) will have lower monthly payments, making it more affordable on a month-to-month basis, but you'll pay more interest over the life of the loan.
How the Calculator Works:
This calculator estimates your maximum affordable home price by first determining the maximum monthly mortgage payment you can likely afford. A common guideline used by lenders is that your total housing costs (Principal, Interest, Taxes, and Insurance – often referred to as PITI) should not exceed a certain percentage of your gross monthly income. This calculator uses a benchmark of 36% for the maximum PITI. It then subtracts your existing monthly debt payments from this maximum PITI to arrive at the maximum monthly mortgage payment you can handle. Finally, it calculates the largest loan amount you can take out based on that monthly payment, the interest rate, and the loan term, and adds your down payment to estimate the maximum home price you can afford.
Disclaimer: This calculator provides an estimate only. Actual loan approval and affordability will depend on a lender's specific underwriting guidelines, your credit score, loan type, and other financial factors. It is recommended to consult with a mortgage professional for personalized advice.