Understanding how much house you can afford is a crucial first step in the home-buying process. This mortgage affordability calculator helps you estimate your potential borrowing capacity based on your income, debts, and estimated down payment. It takes into account common lending criteria to provide a realistic picture of what you might be able to borrow.
Your Estimated Affordability:
How Mortgage Affordability is Calculated
Lenders typically use a few key ratios to determine how much you can borrow. The most common are the Debt-to-Income (DTI) ratios.
Front-end DTI (Housing Ratio): This ratio compares your potential total monthly housing costs (principal, interest, taxes, insurance – PITI) to your gross monthly income. Lenders often prefer this to be no more than 28% for conventional loans.
Back-end DTI (Total Debt Ratio): This ratio compares your total monthly debt obligations (including PITI and all other recurring debts like car loans, student loans, credit card minimums) to your gross monthly income. Lenders often prefer this to be no more than 36%, though some may go up to 43% or higher with compensating factors.
This calculator uses a simplified approach to estimate your maximum loan amount. It assumes that your total housing payment (principal, interest, taxes, and insurance) should not exceed a certain percentage of your gross monthly income, and that your total debt payments (including this new mortgage) also stay within acceptable DTI limits. It also factors in your down payment to estimate the maximum home price you could afford.
Important Note: This is an estimate only. Actual loan approval depends on many factors, including your credit score, employment history, lender-specific policies, and current market conditions. It is highly recommended to speak with a mortgage professional for a pre-approval.
var calculateMortgageAffordability = function() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var monthlyDebtPayments = parseFloat(document.getElementById("monthlyDebtPayments").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var estimatedInterestRate = parseFloat(document.getElementById("estimatedInterestRate").value) / 100; // Convert percentage to decimal
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0 ||
isNaN(monthlyDebtPayments) || monthlyDebtPayments < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(estimatedInterestRate) || estimatedInterestRate <= 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
// Lender's typical DTI limits (common conservative estimates)
var maxFrontEndDTI = 0.28; // Maximum % of gross income for housing
var maxBackEndDTI = 0.36; // Maximum % of gross income for total debt
// Calculate maximum affordable monthly payment based on front-end DTI
var maxMonthlyHousingPayment = grossMonthlyIncome * maxFrontEndDTI;
// Calculate maximum affordable total monthly debt payments based on back-end DTI
var maxTotalMonthlyDebt = grossMonthlyIncome * maxBackEndDTI;
// Calculate the maximum monthly mortgage payment allowed considering existing debts
var affordableMortgagePayment = maxTotalMonthlyDebt – monthlyDebtPayments;
// Use the lower of the two calculated maximum mortgage payments
var finalMaxMonthlyMortgagePayment = Math.min(maxMonthlyHousingPayment, affordableMortgagePayment);
if (finalMaxMonthlyMortgagePayment 0) {
maxLoanAmount = finalMaxMonthlyMortgagePayment * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else { // Handle case where interest rate is 0 (unlikely for mortgages, but for completeness)
maxLoanAmount = finalMaxMonthlyMortgagePayment * numberOfPayments;
}
var estimatedMaxHomePrice = maxLoanAmount + downPayment;
// Display results
resultDiv.innerHTML =
"Estimated Maximum Loan Amount: $" + maxLoanAmount.toFixed(2) + "" +
"Estimated Maximum Affordable Home Price (including down payment): $" + estimatedMaxHomePrice.toFixed(2) + "" +
"Estimated Maximum Monthly Mortgage Payment (Principal & Interest): $" + finalMaxMonthlyMortgagePayment.toFixed(2) + "";
};
.calculator-container {
font-family: sans-serif;
max-width: 800px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ddd;
border-radius: 8px;
background-color: #f9f9f9;
}
.calculator-container h2 {
text-align: center;
color: #333;
margin-bottom: 20px;
}
.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: #555;
}
.input-group input[type="number"],
.input-group input[type="text"] {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
}
button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 5px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease;
margin-bottom: 20px;
}
button:hover {
background-color: #0056b3;
}
.calculator-results {
background-color: #e9ecef;
padding: 15px;
border-radius: 5px;
margin-top: 20px;
}
.calculator-results h3 {
margin-top: 0;
color: #333;
}
.calculator-explanation {
margin-top: 30px;
border-top: 1px solid #eee;
padding-top: 20px;
}
.calculator-explanation h3 {
color: #333;
}
.calculator-explanation p,
.calculator-explanation ul {
line-height: 1.6;
color: #666;
}
.calculator-explanation ul {
margin-top: 10px;
padding-left: 20px;
}
.calculator-explanation li {
margin-bottom: 8px;
}