Understanding how much mortgage you can afford is a crucial first step in the home-buying process. This calculator helps you estimate your maximum affordable mortgage amount based on your income, debts, and estimated interest rates. Remember, this is an estimate, and lenders will consider many other factors.
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.result-section {
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function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(downPayment) ||
annualIncome < 0 || monthlyDebt < 0 || interestRate < 0 || loanTerm <= 0 || downPayment < 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// General affordability guidelines (can vary by lender and location)
// Rule of thumb: Total housing expenses (PITI) should not exceed 28% of gross monthly income.
// Rule of thumb: Total debt payments (including PITI) should not exceed 36% of gross monthly income.
var maxHousingRatio = 0.28;
var maxTotalDebtRatio = 0.36;
var grossMonthlyIncome = annualIncome / 12;
var maxPITI = grossMonthlyIncome * maxHousingRatio; // Principal, Interest, Taxes, Insurance
var maxTotalMonthlyPayments = grossMonthlyIncome * maxTotalDebtRatio;
// Estimate property taxes and homeowner's insurance as a percentage of the home price.
// This is a simplification. Actual costs vary significantly by location.
var estimatedAnnualTaxesRate = 0.012; // e.g., 1.2% of home value
var estimatedAnnualInsuranceRate = 0.004; // e.g., 0.4% of home value
var estimatedMonthlyTaxesAndInsurance = 0; // Will be calculated based on estimated home price
// We need to work backward to estimate the maximum loan amount.
// Let's iterate to find a reasonable home price that satisfies the ratios.
// Start with a reasonable guess for max loan amount and refine.
var maxLoanAmountEstimate = grossMonthlyIncome * 100; // A rough upper bound
var affordableHomePrice = 0;
var calculatedMaxLoan = 0;
for (var i = 0; i maxPITI) {
maxLoanAmountEstimate *= 0.95; // Reduce estimate if PITI is too high
continue;
}
// Check if total debt (existing + PITI) is within the 36% gross income limit
if (monthlyDebt + estimatedPITI > maxTotalMonthlyPayments) {
maxLoanAmountEstimate *= 0.95; // Reduce estimate if total debt is too high
continue;
}
// If both ratios are met, this is a potential maximum loan amount
calculatedMaxLoan = maxLoanAmountEstimate;
break;
}
affordableHomePrice = calculatedMaxLoan + downPayment;
// Calculate the principal and interest (P&I) portion of the maximum loan
var monthlyInterestRate = interestRate / 100 / 12;
var numberOfPayments = loanTerm * 12;
if (interestRate === 0) { // Handle 0% interest rate
var p_and_i = calculatedMaxLoan / numberOfPayments;
} else {
var p_and_i = calculatedMaxLoan * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
// Calculate estimated taxes and insurance based on the calculated affordable home price
var estimatedMonthlyTaxes = affordableHomePrice * estimatedAnnualTaxesRate / 12;
var estimatedMonthlyInsurance = affordableHomePrice * estimatedAnnualInsuranceRate / 12;
var totalEstimatedPITI = p_and_i + estimatedMonthlyTaxes + estimatedMonthlyInsurance;
// Final check on affordability with calculated P&I, taxes, and insurance
if (totalEstimatedPITI > maxPITI || monthlyDebt + totalEstimatedPITI > maxTotalMonthlyPayments) {
resultDiv.innerHTML = "Based on your inputs, it appears you may not qualify for a loan that covers a home of this price under standard debt-to-income ratios. Consider increasing your income, reducing debt, increasing your down payment, or looking for a less expensive home.";
return;
}
resultDiv.innerHTML = `
Estimated Maximum Affordable Home Price: $${affordableHomePrice.toFixed(2)}
Estimated Maximum Mortgage Loan: $${calculatedMaxLoan.toFixed(2)}
Estimated Monthly Principal & Interest (P&I): $${p_and_i.toFixed(2)}
Estimated Monthly Property Taxes: $${estimatedMonthlyTaxes.toFixed(2)}
Estimated Monthly Homeowner's Insurance: $${estimatedMonthlyInsurance.toFixed(2)}
Estimated Total Monthly Housing Payment (PITI): $${totalEstimatedPITI.toFixed(2)}
Note: This is an estimate. Actual affordability depends on lender underwriting, credit score, loan type, and local market conditions.
`;
}