Use this calculator to estimate how much house you can afford based on your income, debts, and desired monthly payment.
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the home-buying process. It's not just about what you *want* to spend, but what you can realistically *afford* without stretching your finances too thin. Lenders will assess your ability to repay a loan, but it's wise to do your own calculations to set your expectations and search within your budget.
Key Factors in Affordability:
Gross Monthly Income: This is your income before taxes and other deductions. Lenders often use a debt-to-income ratio (DTI) to assess risk. A common guideline is that your total housing costs (principal, interest, taxes, insurance, and sometimes HOA dues – often called PITI) should not exceed 28% of your gross monthly income, and your total debt payments (including housing) should not exceed 36% of your gross monthly income.
Monthly Debt Payments: This includes all your existing monthly financial obligations, such as car loans, student loans, credit card payments, and personal loans. The higher your existing debt, the less you'll be able to borrow for a mortgage.
Down Payment: A larger down payment reduces the loan amount you need, which in turn lowers your monthly payments and the total interest paid over the life of the loan. It can also help you avoid Private Mortgage Insurance (PMI) if your down payment is 20% or more of the home's purchase price.
Interest Rate: Even a small difference in the interest rate can significantly impact your monthly payment and the total cost of the loan. Mortgage rates fluctuate based on market conditions and your creditworthiness.
Loan Term: A shorter loan term (e.g., 15 years) means higher monthly payments but less interest paid overall. A longer loan term (e.g., 30 years) results in lower monthly payments but more interest paid over time.
Property Taxes: These are local taxes levied on the value of the property. They vary significantly by location and are typically paid annually or semi-annually.
Homeowner's Insurance: This is a required insurance policy that protects against damage to your home. Costs depend on the home's value, location, and coverage.
Private Mortgage Insurance (PMI): If your down payment is less than 20%, lenders usually require PMI to protect them in case you default on the loan. This adds to your monthly housing cost.
How the Calculator Works:
This calculator estimates your maximum affordable home price. It first determines a comfortable maximum monthly housing payment based on your income and existing debts, using common lender guidelines (like the 28/36 DTI rule). Then, it works backward from that maximum monthly payment to estimate the loan amount you could qualify for, considering the interest rate, loan term, and additional costs like property taxes, homeowner's insurance, and PMI.
Disclaimer: This calculator provides an estimate only and should not be considered financial advice. Your actual borrowing capacity may differ based on lender-specific criteria, credit score, loan programs, and market conditions.
.calculator-container {
font-family: sans-serif;
border: 1px solid #ccc;
padding: 20px;
border-radius: 8px;
max-width: 600px;
margin: 20px auto;
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 {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
}
.calculator-container button {
display: block;
width: 100%;
padding: 12px;
background-color: #007bff;
color: white;
border: none;
border-radius: 5px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease;
margin-top: 10px;
}
.calculator-container button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 25px;
padding: 15px;
background-color: #e9ecef;
border: 1px solid #ced4da;
border-radius: 5px;
font-size: 18px;
text-align: center;
color: #333;
min-height: 50px;
display: flex;
align-items: center;
justify-content: center;
}
article {
max-width: 800px;
margin: 30px auto;
line-height: 1.6;
color: #333;
}
article h3, article h4 {
color: #007bff;
margin-top: 20px;
margin-bottom: 10px;
}
article ul {
list-style-type: disc;
margin-left: 20px;
}
article li {
margin-bottom: 8px;
}
function calculateAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebtPayments = parseFloat(document.getElementById("monthlyDebtPayments").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var propertyTaxes = parseFloat(document.getElementById("propertyTaxes").value);
var homeInsurance = parseFloat(document.getElementById("homeInsurance").value);
var pmi = parseFloat(document.getElementById("pmi").value);
var resultElement = document.getElementById("result");
resultElement.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebtPayments) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(propertyTaxes) || isNaN(homeInsurance) || isNaN(pmi)) {
resultElement.innerHTML = "Please enter valid numbers for all fields.";
return;
}
// Basic DTI calculations
var grossMonthlyIncome = annualIncome / 12;
var maxHousingPayment = grossMonthlyIncome * 0.28; // 28% rule for housing costs
var maxTotalDebtPayment = grossMonthlyIncome * 0.36; // 36% rule for total debt
var affordableMonthlyHousingPayment = Math.min(maxHousingPayment, maxTotalDebtPayment – monthlyDebtPayments);
if (affordableMonthlyHousingPayment <= 0) {
resultElement.innerHTML = "Based on your income and debts, it may be difficult to qualify for a mortgage at this time.";
return;
}
// Adjust affordable housing payment by excluding non-PITI expenses
var annualPropertyTaxes = propertyTaxes;
var annualHomeInsurance = homeInsurance;
var annualPmi = pmi;
var monthlyPropertyTaxes = annualPropertyTaxes / 12;
var monthlyHomeInsurance = annualHomeInsurance / 12;
var monthlyPmi = annualPmi / 12;
var affordablePrincipalAndInterest = affordableMonthlyHousingPayment – monthlyPropertyTaxes – monthlyHomeInsurance – monthlyPmi;
if (affordablePrincipalAndInterest 0) {
maxLoanAmount = affordablePrincipalAndInterest * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else {
// Handle case where interest rate is 0 (unlikely but for completeness)
maxLoanAmount = affordablePrincipalAndInterest * numberOfPayments;
}
var maxAffordablePrice = maxLoanAmount + downPayment;
// Format the output nicely
var formattedMaxAffordablePrice = maxAffordablePrice.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedAffordableMonthlyHousingPayment = affordableMonthlyHousingPayment.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
resultElement.innerHTML = "