Estimate how much house you can afford based on income and debt.
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Maximum Home Price
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Based on a 36% Debt-to-Income Ratio
Max Loan Amount$0
Monthly Principal & Interest$0
Total Monthly Payment$0
function calculateMortgageAffordability() {
// Clear errors
var errorDiv = document.getElementById("macErrorMessage");
var resultDiv = document.getElementById("macResults");
errorDiv.style.display = "none";
// Get Inputs
var annualIncome = parseFloat(document.getElementById("macAnnualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("macMonthlyDebt").value);
var downPayment = parseFloat(document.getElementById("macDownPayment").value);
var interestRate = parseFloat(document.getElementById("macInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("macLoanTerm").value);
var yearlyTax = parseFloat(document.getElementById("macPropTax").value);
var yearlyInsurance = parseFloat(document.getElementById("macInsurance").value);
var monthlyHOA = parseFloat(document.getElementById("macHOA").value);
// Validation
if (isNaN(annualIncome) || annualIncome <= 0) {
errorDiv.innerHTML = "Please enter a valid Annual Income.";
errorDiv.style.display = "block";
return;
}
if (isNaN(interestRate) || interestRate <= 0) {
errorDiv.innerHTML = "Please enter a valid Interest Rate.";
errorDiv.style.display = "block";
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
errorDiv.innerHTML = "Please enter a valid Loan Term.";
errorDiv.style.display = "block";
return;
}
// Default empty optional fields to 0
if (isNaN(monthlyDebt)) monthlyDebt = 0;
if (isNaN(downPayment)) downPayment = 0;
if (isNaN(yearlyTax)) yearlyTax = 0;
if (isNaN(yearlyInsurance)) yearlyInsurance = 0;
if (isNaN(monthlyHOA)) monthlyHOA = 0;
// Calculations
var monthlyIncome = annualIncome / 12;
// DTI Ratios
// Front-end ratio (28% of income for housing)
var maxHousingPaymentFront = monthlyIncome * 0.28;
// Back-end ratio (36% of income for total debt)
var maxTotalDebtPayment = monthlyIncome * 0.36;
var maxHousingPaymentBack = maxTotalDebtPayment – monthlyDebt;
// The allowable housing payment is the lesser of the two
var maxAllowableHousingPayment = Math.min(maxHousingPaymentFront, maxHousingPaymentBack);
// Calculate monthly escrows
var monthlyTax = yearlyTax / 12;
var monthlyInsurance = yearlyInsurance / 12;
var monthlyEscrows = monthlyTax + monthlyInsurance + monthlyHOA;
// Amount available for Principal and Interest (P&I)
var maxPI = maxAllowableHousingPayment – monthlyEscrows;
if (maxPI <= 0) {
errorDiv.innerHTML = "Your current debts are too high relative to your income to qualify for a mortgage under standard guidelines.";
errorDiv.style.display = "block";
resultDiv.style.display = "none";
return;
}
// Calculate Max Loan Amount based on Max P&I
// Formula: PV = PMT * (1 – (1+r)^-n) / r
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
var maxLoanAmount = maxPI * (1 – Math.pow(1 + monthlyRate, -numberOfPayments)) / monthlyRate;
var maxHomePrice = maxLoanAmount + downPayment;
var totalMonthlyPayment = maxPI + monthlyEscrows;
// Formatting Output
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
document.getElementById("macResultPrice").innerHTML = formatter.format(maxHomePrice);
document.getElementById("macResultLoan").innerHTML = formatter.format(maxLoanAmount);
document.getElementById("macResultPI").innerHTML = formatter.format(maxPI);
document.getElementById("macResultTotalMonthly").innerHTML = formatter.format(totalMonthlyPayment);
resultDiv.style.display = "block";
}
How Much House Can I Afford?
Determine your buying power in the real estate market is the first critical step in the home buying process. This Mortgage Affordability Calculator uses the standard debt-to-income (DTI) ratios utilized by lenders to estimate the maximum home price that fits your budget.
Understanding the 28/36 Rule
Lenders primarily use two metrics to decide how much money they are willing to lend you. These are known as the Front-End Ratio and the Back-End Ratio.
Ratio Type
Standard Limit
Definition
Front-End Ratio
28%
The percentage of your gross monthly income that goes toward housing costs (Mortgage Principal, Interest, Taxes, Insurance, and HOA).
Back-End Ratio
36%
The percentage of your gross monthly income that goes toward all debt obligations (Housing + Credit Cards + Student Loans + Car Loans).
Factors That Impact Your Affordability
Down Payment: A larger down payment reduces the loan amount needed, allowing you to purchase a more expensive home for the same monthly payment. It may also remove the need for Private Mortgage Insurance (PMI).
Interest Rates: Even a small fluctuation in interest rates can significantly impact your buying power. For example, on a $300,000 loan, a 1% increase in rate can increase your monthly payment by over $180.
Existing Debt: High monthly debt payments (like car leases or credit card minimums) reduce your Back-End Ratio capacity. Paying off a $400/month car loan can increase your mortgage borrowing power by roughly $60,000 to $70,000 depending on rates.
Property Taxes & HOA: High property taxes or expensive Homeowner Association (HOA) fees eat into your monthly payment limit, reducing the amount of money left over for the actual mortgage principal.
Example Calculation
Let's assume the following scenario:
Annual Income: $90,000 ($7,500/month)
Monthly Debts: $500
Down Payment: $40,000
Interest Rate: 6.5%
Using the 28% rule, your max housing payment is $2,100. Using the 36% rule, your max total debt is $2,700; subtracting the $500 debt leaves $2,200 for housing. The lender will use the lower number ($2,100). After deducting estimated taxes and insurance, the calculator determines the loan amount supported by the remaining cash flow.