Understanding how much house you can afford is a crucial first step in the home-buying process.
Our Mortgage Affordability Calculator helps you estimate your potential borrowing power based on your income, debts, and desired down payment.
This tool considers key factors that lenders use to determine mortgage eligibility, providing you with a realistic financial outlook.
How Much House Can You Afford?
Several factors influence how much a lender is willing to loan you for a mortgage. These typically include:
Gross Monthly Income: This is your total income before taxes and other deductions. Lenders often use a debt-to-income (DTI) ratio to assess your ability to repay a loan.
Monthly Debt Payments: This includes minimum payments on credit cards, student loans, car loans, and any other recurring debts.
Estimated Annual Property Taxes: These are taxes levied by your local government based on the value of your property.
Estimated Annual Homeowner's Insurance: This is the cost of insuring your home against damage or loss.
Estimated Monthly HOA Fees (if applicable): If you're buying a condo or a home in a community with a Homeowners Association, these fees cover shared amenities and maintenance.
Down Payment: The amount of money you pay upfront towards the purchase price of the home. A larger down payment generally reduces your loan amount and can improve your interest rate.
Estimated Interest Rate: This is the annual rate charged by the lender on the loan. It significantly impacts your monthly payment and the total cost of the loan over time.
Loan Term (in years): This is the duration over which you'll repay the mortgage loan. Common terms are 15 and 30 years.
By inputting these details into our calculator, you can get an estimate of the maximum mortgage amount you might qualify for, and consequently, the approximate price range of homes you can consider. Remember, this is an estimation, and your actual loan approval will depend on a lender's full underwriting process, including your credit score and employment history.
Mortgage Affordability Calculator
function calculateAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var totalMonthlyDebt = parseFloat(document.getElementById("totalMonthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var propertyTaxAnnual = parseFloat(document.getElementById("propertyTaxAnnual").value);
var homeInsuranceAnnual = parseFloat(document.getElementById("homeInsuranceAnnual").value);
var hoaFeesMonthly = parseFloat(document.getElementById("hoaFeesMonthly").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Validate inputs
if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0 ||
isNaN(totalMonthlyDebt) || totalMonthlyDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTerm) || loanTerm <= 0 ||
isNaN(propertyTaxAnnual) || propertyTaxAnnual < 0 ||
isNaN(homeInsuranceAnnual) || homeInsuranceAnnual < 0 ||
isNaN(hoaFeesMonthly) || hoaFeesMonthly < 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// — Affordability Calculation Logic —
// This is a simplified model. Lenders use more complex algorithms.
// 1. Calculate maximum PITI (Principal, Interest, Taxes, Insurance) a borrower can afford
// Common DTI ratios used by lenders: Front-end (housing) ~28-31%, Back-end (all debt) ~36-43%
// We'll use a back-end DTI of 43% for a more conservative estimate
var maxTotalDebtPayment = grossMonthlyIncome * 0.43;
var maxPITI = maxTotalDebtPayment – totalMonthlyDebt;
if (maxPITI <= 0) {
resultDiv.innerHTML = "Based on your income and existing debts, you may not qualify for additional mortgage payments.";
return;
}
// 2. Calculate monthly property taxes, homeowner's insurance, and HOA fees
var monthlyPropertyTax = propertyTaxAnnual / 12;
var monthlyHomeInsurance = homeInsuranceAnnual / 12;
var monthlyHOA = hoaFeesMonthly;
// 3. Subtract PITI components (Taxes, Insurance, HOA) from maxPITI to find max P&I
var maxPrincipalAndInterest = maxPITI – monthlyPropertyTax – monthlyHomeInsurance – monthlyHOA;
if (maxPrincipalAndInterest 0) {
var factor = Math.pow(1 + monthlyInterestRate, numberOfPayments);
maxLoanAmount = maxPrincipalAndInterest * (factor – 1) / (monthlyInterestRate * factor);
} else { // Handle 0% interest rate case (though rare for mortgages)
maxLoanAmount = maxPrincipalAndInterest * numberOfPayments;
}
// 5. Calculate the maximum home price
var maxHomePrice = maxLoanAmount + downPayment;
// Format results for display
var formattedMaxHomePrice = maxHomePrice.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxPITI = maxPITI.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxPrincipalAndInterest = maxPrincipalAndInterest.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
resultDiv.innerHTML =
"
Estimated Affordability Results:
" +
"Maximum Home Price You Can Afford: " + formattedMaxHomePrice + "" +
"Maximum Mortgage Loan Amount: " + formattedMaxLoanAmount + "" +
"Estimated Maximum Total Monthly Housing Payment (PITI + HOA): " + formattedMaxPITI.toLocaleString(undefined, { style: 'currency', currency: 'USD' }) + "" +
"Estimated Maximum Principal & Interest Payment: " + formattedMaxPrincipalAndInterest.toLocaleString(undefined, { style: 'currency', currency: 'USD' }) + "";
}