Determine exactly how much house you can afford based on your income and debts.
$
$
$
%
$
$
Maximum Home Price
$0
Max Monthly Payment
$0
Loan Amount
$0
Debt-to-Income Used
0%
*Calculation based on the standard 28/36 qualifying rule.
Understanding Your Home Purchasing Power
Entering the housing market can be daunting, but understanding your budget is the first critical step. This Home Affordability Calculator uses the industry-standard "28/36 Rule" used by mortgage lenders to determine how much they are willing to lend you. By analyzing your gross income, existing debts, and the projected costs of the new home, we provide a realistic estimate of your maximum purchase price.
How the Calculation Works (The 28/36 Rule)
Mortgage lenders look at two primary "Debt-to-Income" (DTI) ratios to ensure you can comfortably make your payments:
Front-End Ratio (28%): This rule states that your total housing costs (Principal, Interest, Taxes, and Insurance – PITI) should not exceed 28% of your gross monthly income.
Back-End Ratio (36%): This rule states that your total housing costs plus your existing monthly debts (credit cards, student loans, car payments) should not exceed 36% of your gross monthly income.
The calculator determines the maximum monthly payment allowed under both rules and uses the lower of the two as your safety limit. This ensures you aren't overleveraged.
Factors Influencing Your Affordability
Several variables can drastically change "how much house" you can buy:
Interest Rates: Even a 1% increase in interest rates can reduce your purchasing power by tens of thousands of dollars because more of your monthly payment goes toward interest rather than principal.
Down Payment: A larger down payment reduces the loan amount needed, directly increasing the price of the home you can afford. It may also help you avoid Private Mortgage Insurance (PMI).
Monthly Debts: Reducing your recurring monthly debts is the fastest way to improve your back-end ratio. Paying off a car loan or credit card balance can free up significant room in your budget for a mortgage.
Why Include Taxes and Insurance?
Many first-time buyers focus solely on the mortgage principal and interest. However, property taxes and homeowners insurance are significant components of your monthly obligation. In high-tax areas, these costs can reduce your buying power by reducing the amount of cash available to service the actual loan debt. Our calculator deducts these estimated costs from your max allowable payment to give you a true "Principal and Interest" budget.
function calculateAffordability() {
// 1. Get Input Values
var annualIncome = parseFloat(document.getElementById('macAnnualIncome').value);
var monthlyDebts = parseFloat(document.getElementById('macMonthlyDebts').value);
var downPayment = parseFloat(document.getElementById('macDownPayment').value);
var interestRate = parseFloat(document.getElementById('macInterestRate').value);
var loanTerm = parseFloat(document.getElementById('macLoanTerm').value);
var propertyTax = parseFloat(document.getElementById('macPropertyTax').value);
var homeInsurance = parseFloat(document.getElementById('macHomeInsurance').value);
// 2. Validate Inputs (Handle NaN or empty)
if (isNaN(annualIncome)) annualIncome = 0;
if (isNaN(monthlyDebts)) monthlyDebts = 0;
if (isNaN(downPayment)) downPayment = 0;
if (isNaN(interestRate)) interestRate = 0;
if (isNaN(loanTerm)) loanTerm = 30;
if (isNaN(propertyTax)) propertyTax = 0;
if (isNaN(homeInsurance)) homeInsurance = 0;
// 3. Logic: Calculate Max Allowable Monthly Payment (PITI)
var monthlyIncome = annualIncome / 12;
// Front-End Ratio (28% of Income for Housing)
var maxHousingFront = monthlyIncome * 0.28;
// Back-End Ratio (36% of Income for Housing + Debts)
var maxTotalBack = monthlyIncome * 0.36;
var maxHousingBack = maxTotalBack – monthlyDebts;
// The limiting factor is the lower of the two
var maxAllowablePITI = Math.min(maxHousingFront, maxHousingBack);
// Which rule was used? (For display/logic purposes)
var limitingRule = (maxHousingFront 0) {
// 5. Reverse Calculate Loan Amount from P&I
// Formula: PV = Pmt * (1 – (1+r)^-n) / r
var monthlyRate = (interestRate / 100) / 12;
var numPayments = loanTerm * 12;
if (monthlyRate === 0) {
// Zero interest edge case
maxLoanAmount = maxPrincipalAndInterest * numPayments;
} else {
maxLoanAmount = maxPrincipalAndInterest * ( (1 – Math.pow(1 + monthlyRate, -numPayments)) / monthlyRate );
}
maxHomePrice = maxLoanAmount + downPayment;
} else {
maxAllowablePITI = 0; // Cap at 0 for display if negative
}
// 6. Formatting Helper
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
// 7. Display Results
document.getElementById('macMaxHomePrice').innerText = formatter.format(maxHomePrice);
document.getElementById('macMaxMonthly').innerText = formatter.format(maxAllowablePITI);
document.getElementById('macLoanAmount').innerText = formatter.format(maxLoanAmount);
document.getElementById('macDTIUsed').innerText = limitingRule;
// Show result div
document.getElementById('macResult').style.display = 'block';
}