Use this calculator to estimate how much house you can afford based on your income, debts, and down payment. This tool provides a preliminary estimate and does not constitute a loan approval.
.calculator-container {
font-family: Arial, sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 500px;
margin: 20px auto;
background-color: #f9f9f9;
}
.calculator-container h2 {
text-align: center;
color: #333;
margin-bottom: 15px;
}
.calculator-container p {
text-align: center;
color: #555;
font-size: 0.9em;
margin-bottom: 25px;
}
.calculator-inputs {
display: grid;
grid-template-columns: 1fr;
gap: 15px;
margin-bottom: 20px;
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
margin-bottom: 5px;
font-weight: bold;
color: #444;
}
.input-group input[type="number"] {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1em;
}
.calculator-container button {
display: block;
width: 100%;
padding: 12px 15px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 1.1em;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 25px;
padding: 15px;
border: 1px solid #d4edda;
background-color: #e9ecef;
border-radius: 4px;
text-align: center;
font-size: 1.1em;
color: #155724;
font-weight: bold;
}
function calculateMortgageAffordability() {
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 loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTermYears) ||
annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTermYears <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Common lending guidelines suggest a Debt-to-Income (DTI) ratio of around 36%-43%.
// We'll use 36% for front-end DTI (housing costs) and 43% for back-end DTI (all debts).
var maxMonthlyHousingCost_FrontEndDTI = (annualIncome / 12) * 0.36;
var maxMonthlyHousingCost_BackEndDTI = (annualIncome / 12) – monthlyDebt;
// The actual maximum affordable housing cost is the lower of the two DTI limits.
var maxMonthlyHousingCost = Math.min(maxMonthlyHousingCost_FrontEndDTI, maxMonthlyHousingCost_BackEndDTI);
if (maxMonthlyHousingCost <= 0) {
resultDiv.innerHTML = "Based on your income and debts, you may not qualify for a mortgage at this time. Please consult a mortgage professional.";
return;
}
// Now, we need to calculate the maximum loan amount based on the maximum monthly housing cost.
// The formula for a mortgage payment is M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where:
// M = Monthly Payment (maxMonthlyHousingCost)
// P = Principal Loan Amount (what we want to find)
// i = monthly interest rate (interestRate / 100 / 12)
// n = total number of payments (loanTermYears * 12)
var monthlyInterestRate = interestRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
// Rearranging the formula to solve for P:
// P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ]
var maxLoanAmount = maxMonthlyHousingCost * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
// To find the maximum affordable home price, add the down payment to the maximum loan amount.
var maxAffordableHomePrice = maxLoanAmount + downPayment;
// Rounding to two decimal places for currency.
var formattedMaxAffordableHomePrice = maxAffordableHomePrice.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedMaxMonthlyHousingCost = maxMonthlyHousingCost.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 });
resultDiv.innerHTML = "Estimated Maximum Home Price You Can Afford: $" + formattedMaxAffordableHomePrice + "" +
"Estimated Maximum Loan Amount: $" + formattedMaxLoanAmount + "" +
"Estimated Maximum Monthly Housing Payment (Principal, Interest, Taxes, Insurance): $" + formattedMaxMonthlyHousingCost;
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the home-buying process. It's not just about how much a lender is willing to give you; it's about what you can comfortably manage each month without overextending your finances. This mortgage affordability calculator helps you estimate your potential purchasing power.
Key Factors Influencing Affordability:
Annual Income: This is the primary driver of your borrowing capacity. Lenders look at your gross annual income to determine your ability to repay a loan.
Monthly Debt Payments: This includes all your existing monthly financial obligations, such as car loans, student loans, credit card minimum payments, and any other recurring debts. These are factored into your Debt-to-Income (DTI) ratio.
Down Payment: The larger your down payment, the less you need to borrow, which can significantly reduce your monthly payments and the total interest paid over the life of the loan. A larger down payment can also improve your chances of loan approval and secure better interest rates.
Interest Rate: Even small differences in interest rates can have a substantial impact on your monthly payment and the total cost of your mortgage over time. Mortgage rates are influenced by market conditions, your credit score, and the loan term.
Loan Term: Mortgages are typically offered in terms of 15, 20, or 30 years. Shorter loan terms result in higher monthly payments but less total interest paid. Longer terms mean lower monthly payments but more interest paid overall.
How the Calculator Works (Simplified):
This calculator uses common lending guidelines to estimate affordability. It calculates two key Debt-to-Income (DTI) ratios:
Front-end DTI: This typically limits your total housing expenses (principal, interest, property taxes, homeowner's insurance, and sometimes HOA fees) to about 36% of your gross monthly income.
Back-end DTI: This limits your total debt obligations (housing costs plus all other monthly debt payments) to around 43% of your gross monthly income.
The calculator determines the maximum monthly housing payment you can afford by taking the lower of these two DTI limits. It then uses a standard mortgage payment formula to work backward and estimate the maximum loan amount you could qualify for, given your desired loan term and interest rate. Finally, it adds your down payment to this maximum loan amount to estimate the maximum home price you might be able to afford.
Important Considerations:
This is an estimate: Lender criteria can vary, and this calculator does not account for all potential factors, such as credit scores, closing costs, property taxes, homeowner's insurance, private mortgage insurance (PMI), or HOA fees, which can all affect your actual affordability and monthly payments.
Taxes and Insurance: The calculation for maximum monthly housing cost includes an estimate for taxes and insurance, which can vary significantly by location.
Consult a Professional: For an accurate assessment and pre-approval, it is essential to speak with a mortgage lender or broker.