Determining how much you can afford for a mortgage is a crucial step in the home-buying process. It's not just about what a lender might approve you for; it's about what fits comfortably within your budget and lifestyle. This Mortgage Affordability Calculator helps you estimate the maximum mortgage loan you could potentially handle based on your income, existing debts, and current interest rates.
Key Factors to Consider:
Monthly Income: This is the foundation of your borrowing power. Lenders typically look at your gross monthly income (before taxes).
Existing Debt Payments: This includes credit card minimums, car loans, student loans, and any other recurring monthly debt obligations. These significantly impact how much of your income is available for a mortgage payment.
Interest Rate: Even small differences in interest rates can have a substantial impact on your monthly payment and the total interest paid over the life of the loan. Rates fluctuate, so using an estimated current rate is important for a realistic calculation.
Loan Term: The length of your mortgage (commonly 15, 20, or 30 years). A longer term means lower monthly payments but more interest paid overall. A shorter term means higher monthly payments but less interest paid.
How the Calculator Works:
This calculator uses common lending guidelines, often referred to as the "front-end" and "back-end" debt-to-income (DTI) ratios. While lenders have specific criteria, a general rule of thumb is that your total housing expenses (Principal, Interest, Taxes, Insurance – PITI) should not exceed 28% of your gross monthly income (front-end DTI), and your total debt obligations (including PITI) should not exceed 36% of your gross monthly income (back-end DTI).
This calculator simplifies this by estimating the maximum monthly payment you can afford based on these DTI guidelines after accounting for your existing debts. It then uses a standard mortgage payment formula to determine the principal loan amount you could borrow.
Important Note: This calculator provides an *estimate*. Actual mortgage approval depends on many other factors, including your credit score, down payment, lender-specific policies, and the property's appraisal. It's always best to speak with a mortgage professional for personalized advice.
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function calculateAffordability() {
var monthlyIncome = parseFloat(document.getElementById("monthlyIncome").value);
var existingDebts = parseFloat(document.getElementById("existingDebts").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
if (isNaN(monthlyIncome) || isNaN(existingDebts) || isNaN(interestRate) || isNaN(loanTerm) ||
monthlyIncome <= 0 || existingDebts < 0 || interestRate <= 0 || loanTerm <= 0) {
resultDiv.innerHTML = 'Please enter valid positive numbers for all fields.';
return;
}
// Using a common guideline: max 28% of gross income for PITI (housing) + 36% for total debt
// We'll use the 36% back-end DTI as the primary constraint for total debt.
// Max allowed total monthly debt payments = 36% of monthly income
var maxTotalDebtAllowed = monthlyIncome * 0.36;
// Subtract existing debts to find the maximum affordable mortgage payment
var maxMortgagePayment = maxTotalDebtAllowed – existingDebts;
// Ensure maxMortgagePayment is not negative
if (maxMortgagePayment 0) {
var numerator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
maxLoanAmount = maxMortgagePayment * (numerator / denominator);
} else {
// If interest rate is 0 (unlikely for mortgage, but for calculation completeness)
maxLoanAmount = maxMortgagePayment * numberOfPayments;
}
// Format the results
var formattedMaxLoanAmount = "$" + maxLoanAmount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
var formattedMaxMortgagePayment = "$" + maxMortgagePayment.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
resultDiv.innerHTML =
'Estimated Maximum Mortgage Payment You Can Afford: ' + formattedMaxMortgagePayment + '' +
'Estimated Maximum Mortgage Loan Amount: ' + formattedMaxLoanAmount + '' +
'(This estimate is based on a 36% total debt-to-income ratio and does not include taxes, insurance, or PMI.)';
}