Use this calculator to estimate how much you can afford to borrow for a mortgage based on your income, debts, and estimated interest rate.
.calculator-container {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
background-color: #f9f9f9;
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display: grid;
grid-template-columns: repeat(auto-fit, minmax(250px, 1fr));
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margin-bottom: 20px;
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flex-direction: column;
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.input-group label {
margin-bottom: 5px;
font-weight: bold;
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.input-group input {
padding: 8px;
border: 1px solid #ccc;
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button {
padding: 10px 15px;
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color: white;
border: none;
border-radius: 4px;
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margin-top: 15px;
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button:hover {
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.calculator-result {
margin-top: 20px;
padding: 15px;
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background-color: #e9ecef;
color: #155724;
border-radius: 4px;
font-size: 1.1em;
text-align: center;
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 loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = "; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
// Lenders typically allow PITI (Principal, Interest, Taxes, Insurance) to be up to 28%-36% of gross monthly income.
// Let's use 28% for a conservative estimate and 36% for a more aggressive one.
var maxPITI_lowerBound = annualIncome * 0.28 / 12;
var maxPITI_upperBound = annualIncome * 0.36 / 12;
// We need to estimate monthly taxes and insurance. A common rule of thumb is 1% of the home value annually for taxes and insurance combined, or around 0.083% per month.
// This is a simplification; actual taxes and insurance vary significantly by location and property.
// Since we don't know the home value yet, we'll estimate this based on potential loan amounts.
// A more accurate calculation would iterate or ask for these. For this simplified calculator, we'll assume a fixed percentage of the *loan amount* for P&I, and then deduct estimated T&I from the total allowable PITI.
// Let's assume a combined monthly tax and insurance cost of roughly 0.1% of the potential loan amount per month.
// This is a significant assumption. A more precise calculator would ask for these inputs.
// For this calculator, we will estimate the maximum P&I payment by subtracting an estimated monthly tax and insurance from the max PITI.
// Let's initially estimate T&I at 0.1% of loan amount for demonstration purposes.
var maxMonthlyPayment_lowerBound = maxPITI_lowerBound – monthlyDebt;
var maxMonthlyPayment_upperBound = maxPITI_upperBound – monthlyDebt;
// Ensure calculated monthly payments are not negative
maxMonthlyPayment_lowerBound = Math.max(0, maxMonthlyPayment_lowerBound);
maxMonthlyPayment_upperBound = Math.max(0, maxMonthlyPayment_upperBound);
// Mortgage Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where:
// M = monthly mortgage payment (principal and interest)
// P = principal loan amount
// i = monthly interest rate (annual rate / 12)
// n = total number of payments (loan term in years * 12)
var monthlyInterestRate = interestRate / 100 / 12;
var numberOfPayments = loanTerm * 12;
// We need to find P (the loan amount). Rearranging the formula:
// P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ]
var maxLoanAmount_lowerBound = 0;
var maxLoanAmount_upperBound = 0;
// Let's re-estimate T&I: A more common approach for affordability is to calculate maximum P&I directly.
// The 28/36 rule implies a maximum total housing expense (PITI) of 28-36% of gross monthly income.
// The remaining capacity after monthly debts is for PITI.
var maxPITI_allowable_lower = (annualIncome / 12) * 0.28;
var maxPITI_allowable_upper = (annualIncome / 12) * 0.36;
var maxPITI_remaining_lower = maxPITI_allowable_lower – monthlyDebt;
var maxPITI_remaining_upper = maxPITI_allowable_upper – monthlyDebt;
// Ensure we have positive capacity for PITI
maxPITI_remaining_lower = Math.max(0, maxPITI_remaining_lower);
maxPITI_remaining_upper = Math.max(0, maxPITI_remaining_upper);
// Now, we need to estimate the portion of PITI that goes to Taxes and Insurance.
// This is the most challenging part without direct input. Let's use a common approximation:
// Taxes and Insurance (TI) might be 0.1% of the home value per month.
// Since Home Value = Loan Amount + Down Payment, TI_monthly ≈ 0.001 * (Loan Amount + Down Payment)
// So, Max P&I = Max PITI Remaining – TI_monthly
// Max P&I = Max PITI Remaining – 0.001 * (Loan Amount + Down Payment)
// This creates a circular dependency.
// A simpler, common method: Assume a portion of the PITI is for P&I.
// For example, if PITI is $2000, and TI is estimated at $500, then P&I is $1500.
// Let's try to estimate the maximum *loan amount* directly, assuming TI is a percentage of the *loan amount*.
// Assume TI is 0.1% of the loan amount per month.
// Max P&I = Max PITI Remaining – (0.001 * Loan Amount)
// Using the mortgage formula rearranged for P (Loan Amount), we can iteratively solve or simplify.
// Let's use a common lending guideline: Debt-to-Income ratio (DTI) for housing (PITI) is typically capped at 28-36%.
// After deducting existing debts, the remaining income can service the PITI.
// Maximum PITI = (Annual Income / 12) * DTI_percentage
// Maximum P&I = Maximum PITI – Estimated Monthly Taxes & Insurance
// Since we don't have explicit inputs for taxes and insurance, we'll make a common assumption:
// Taxes and Insurance are roughly 1/12th of 1% of the *loan amount* per month (0.083% of loan amount).
// This is highly variable and a simplification.
var estimatedMonthlyTaxesAndInsuranceRate = 0.00083; // ~1% of loan value annually / 12
// We need to solve for Loan Amount (P) where:
// P = (Max P&I) * [ (1 + i)^n – 1] / [ i(1 + i)^n ]
// And Max P&I = Max PITI Remaining – (estimatedMonthlyTaxesAndInsuranceRate * P)
// var M = Max P&I.
// P = (M – estimatedMonthlyTaxesAndInsuranceRate * P) * Factor
// Where Factor = [ (1 + i)^n – 1] / [ i(1 + i)^n ]
// P = M * Factor – estimatedMonthlyTaxesAndInsuranceRate * P * Factor
// P + estimatedMonthlyTaxesAndInsuranceRate * P * Factor = M * Factor
// P * (1 + estimatedMonthlyTaxesAndInsuranceRate * Factor) = M * Factor
// P = (M * Factor) / (1 + estimatedMonthlyTaxesAndInsuranceRate * Factor)
var calculatedMaxLoanAmount_lower = 0;
var calculatedMaxLoanAmount_upper = 0;
// Calculate the mortgage factor for P&I
var mortgageFactor = 0;
if (monthlyInterestRate > 0) {
mortgageFactor = (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else {
// Handle 0% interest rate – loan is simply monthly payment / number of payments
// This scenario is unlikely for mortgages, but for completeness:
// If interest rate is 0, then P&I = P / n. So P = M * n.
// The logic below handles this if monthlyInterestRate is 0, mortgageFactor approaches n.
}
// Calculate max loan amount for the lower DTI bound
if (maxPITI_remaining_lower > 0) {
var maxPI_lower = maxPITI_remaining_lower – (estimatedMonthlyTaxesAndInsuranceRate * calculatedMaxLoanAmount_lower); // Initial estimate, will iterate or use derived formula
// Using the derived formula:
if (mortgageFactor > 0) { // Ensure we can divide
calculatedMaxLoanAmount_lower = (maxPITI_remaining_lower * mortgageFactor) / (1 + estimatedMonthlyTaxesAndInsuranceRate * mortgageFactor);
} else { // For 0% interest
calculatedMaxLoanAmount_lower = maxPITI_remaining_lower * numberOfPayments;
}
}
// Calculate max loan amount for the upper DTI bound
if (maxPITI_remaining_upper > 0) {
var maxPI_upper = maxPITI_remaining_upper – (estimatedMonthlyTaxesAndInsuranceRate * calculatedMaxLoanAmount_upper); // Initial estimate
// Using the derived formula:
if (mortgageFactor > 0) { // Ensure we can divide
calculatedMaxLoanAmount_upper = (maxPITI_remaining_upper * mortgageFactor) / (1 + estimatedMonthlyTaxesAndInsuranceRate * mortgageFactor);
} else { // For 0% interest
calculatedMaxLoanAmount_upper = maxPITI_remaining_upper * numberOfPayments;
}
}
// Ensure loan amounts are not negative
calculatedMaxLoanAmount_lower = Math.max(0, calculatedMaxLoanAmount_lower);
calculatedMaxLoanAmount_upper = Math.max(0, calculatedMaxLoanAmount_upper);
// Maximum home price = Loan Amount + Down Payment
var maxHomePrice_lowerBound = calculatedMaxLoanAmount_lower + downPayment;
var maxHomePrice_upperBound = calculatedMaxLoanAmount_upper + downPayment;
var affordabilityResult = "";
affordabilityResult += "Estimated maximum mortgage loan amount (based on 28% DTI): $" + Math.round(calculatedMaxLoanAmount_lower).toLocaleString() + "";
affordabilityResult += "Estimated maximum home price (based on 28% DTI): $" + Math.round(maxHomePrice_lowerBound).toLocaleString() + "";
affordabilityResult += "Estimated maximum mortgage loan amount (based on 36% DTI): $" + Math.round(calculatedMaxLoanAmount_upper).toLocaleString() + "";
affordabilityResult += "Estimated maximum home price (based on 36% DTI): $" + Math.round(maxHomePrice_upperBound).toLocaleString() + "";
affordabilityResult += "Note: This is an estimate. Actual affordability depends on lender policies, credit score, property taxes, homeowner's insurance, and other factors. The estimated monthly taxes and insurance used here (approx. 0.1% of loan amount per month) are a simplification.";
resultDiv.innerHTML = affordabilityResult;
}
Understanding Mortgage Affordability
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, but also about what you can comfortably manage as a monthly payment without straining your finances. Several key factors influence your mortgage affordability, and understanding them can help you set realistic expectations.
Key Factors in Mortgage Affordability:
Annual Gross Income: This is the primary determinant. Lenders look at your total income before taxes. The higher your income, the more you can typically borrow.
Existing Monthly Debt Payments: This includes all recurring monthly obligations such as car loans, student loans, credit card payments, and personal loans. Lenders use these figures to calculate your Debt-to-Income (DTI) ratio.
Down Payment: The amount of money you can put down upfront significantly impacts your loan amount and overall home price. A larger down payment reduces the amount you need to borrow, potentially lowering your monthly payments and qualifying you for better loan terms.
Interest Rate: The annual interest rate on your mortgage directly affects your monthly principal and interest payment. Even a small difference in the interest rate can lead to thousands of dollars in extra cost over the life of the loan.
Loan Term: This is the duration over which you'll repay the mortgage, typically 15 or 30 years. A shorter loan term usually means higher monthly payments but less interest paid overall. A longer term results in lower monthly payments but more interest paid over time.
Property Taxes and Homeowner's Insurance: These are often bundled into your monthly mortgage payment as part of your PITI (Principal, Interest, Taxes, and Insurance). They vary significantly by location and the value of the home.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's purchase price, lenders will typically require PMI, which adds to your monthly housing cost.
Debt-to-Income (DTI) Ratio Explained:
Lenders commonly use the DTI ratio to assess your ability to repay a loan. It's calculated by dividing your total monthly debt payments by your gross monthly income.
Front-End Ratio (Housing Ratio): This measures the percentage of your gross monthly income that would go towards housing expenses (principal, interest, taxes, and insurance – PITI). Lenders often prefer this to be around 28% or lower.
Back-End Ratio (Total DTI): This measures the total percentage of your gross monthly income that would go towards all debt payments, including housing. This is usually capped at around 36% to 43%, depending on the lender and loan program.
Our calculator provides an estimated range based on these common DTI guidelines.
How the Calculator Works:
The Mortgage Affordability Calculator uses your provided information to estimate the maximum loan amount you might qualify for based on typical lender criteria (using the 28% front-end and 36% back-end DTI ratios). It subtracts your existing monthly debts and an estimated amount for property taxes and homeowner's insurance from your maximum allowable monthly housing payment to determine the portion available for principal and interest. It then uses the mortgage payment formula to calculate the maximum loan principal you can afford with that P&I payment, given the interest rate and loan term. Finally, it adds your down payment to the estimated maximum loan amount to provide an estimated maximum home price you could afford.
Disclaimer: This calculator is for informational purposes only and does not constitute financial advice. Lenders have specific underwriting guidelines, and your actual borrowing capacity may vary. It is highly recommended to consult with a mortgage professional for personalized advice.