Please enter valid positive numbers for all fields.
Maximum Home Price
$0
Max Monthly Payment
$0
(Including Tax/Ins)
Loan Amount
$0
Affordability Breakdown:
Based on a % Debt-to-Income (DTI) ratio.
Your monthly gross income is .
The calculation limits your total housing payment to ensure you don't overextend financially.
function calculateAffordability() {
var incomeInput = document.getElementById('macAnnualIncome').value;
var debtsInput = document.getElementById('macMonthlyDebts').value;
var downPaymentInput = document.getElementById('macDownPayment').value;
var rateInput = document.getElementById('macInterestRate').value;
var termInput = document.getElementById('macLoanTerm').value;
var taxInsInput = document.getElementById('macTaxIns').value;
var income = parseFloat(incomeInput);
var debts = parseFloat(debtsInput);
var downPayment = parseFloat(downPaymentInput);
var rate = parseFloat(rateInput);
var term = parseFloat(termInput);
var taxIns = parseFloat(taxInsInput);
var errorDiv = document.getElementById('macErrorMessage');
var resultsDiv = document.getElementById('macResultsSection');
if (isNaN(income) || isNaN(debts) || isNaN(downPayment) || isNaN(rate) || isNaN(term) || isNaN(taxIns) || income <= 0 || rate < 0) {
errorDiv.style.display = 'block';
resultsDiv.style.display = 'none';
return;
}
errorDiv.style.display = 'none';
// 28/36 Rule Logic
var monthlyIncome = income / 12;
// Front-end Ratio (28% of gross income for housing)
var limitFront = monthlyIncome * 0.28;
// Back-end Ratio (36% of gross income for total debt – existing debts)
var limitBack = (monthlyIncome * 0.36) – debts;
// The limiting factor is the lower of the two
var maxTotalHousingPayment = Math.min(limitFront, limitBack);
// Ensure max payment isn't negative (if debts are extremely high)
if (maxTotalHousingPayment <= taxIns) {
resultsDiv.style.display = 'block';
document.getElementById('macResultPrice').innerHTML = "$0";
document.getElementById('macResultPayment').innerHTML = "$0";
document.getElementById('macResultLoan').innerHTML = "$0";
document.getElementById('macDtiUsed').innerHTML = "36";
document.getElementById('macMonthlyGross').innerHTML = "$" + monthlyIncome.toLocaleString('en-US', {maximumFractionDigits: 0});
return;
}
// Calculate Max Principal & Interest (P&I)
var maxPandI = maxTotalHousingPayment – taxIns;
// Mortgage Calculation Variables
var r = rate / 100 / 12; // Monthly interest rate
var n = term * 12; // Total number of payments
// Calculate Max Loan Amount derived from Max P&I
// Formula: Loan = (Payment * ( (1+r)^n – 1 )) / ( r * (1+r)^n )
var maxLoan = 0;
if (r === 0) {
maxLoan = maxPandI * n;
} else {
maxLoan = (maxPandI * (Math.pow(1 + r, n) – 1)) / (r * Math.pow(1 + r, n));
}
var maxHomePrice = maxLoan + downPayment;
// Determine which DTI limit was hit for the display
var dtiLimit = (limitFront < limitBack) ? "28" : "36";
// Display Results
resultsDiv.style.display = 'block';
document.getElementById('macResultPrice').innerHTML = "$" + Math.floor(maxHomePrice).toLocaleString('en-US');
document.getElementById('macResultPayment').innerHTML = "$" + Math.floor(maxTotalHousingPayment).toLocaleString('en-US');
document.getElementById('macResultLoan').innerHTML = "$" + Math.floor(maxLoan).toLocaleString('en-US');
document.getElementById('macDtiUsed').innerHTML = dtiLimit;
document.getElementById('macMonthlyGross').innerHTML = "$" + monthlyIncome.toLocaleString('en-US', {maximumFractionDigits: 0});
}
How Much House Can I Afford?
Determining your home buying budget is the most critical first step in the homeownership journey. This Mortgage Affordability Calculator uses the standard debt-to-income (DTI) ratios preferred by most lenders to provide a realistic estimate of your purchasing power.
Understanding the 28/36 Rule
Lenders typically use two specific ratios to decide how much money they are willing to lend you. This calculator checks both and uses the lower, safer limit for your result:
The Front-End Ratio (28%): This rule suggests that your annual projected housing costs (mortgage principal, interest, taxes, and insurance) should not exceed 28% of your gross annual income.
The Back-End Ratio (36%): This looks at your total debt load. It states that your housing costs plus all other recurring monthly debts (like car loans, student loans, and credit card minimums) should not exceed 36% of your gross income.
Factors That Impact Your Affordability
While income is important, several other factors drastically change your home buying budget:
1. Debt Load: High monthly debt payments reduce your borrowing power dollar-for-dollar. Paying off a $400 car payment can often increase your mortgage eligibility by $50,000 or more.
2. Down Payment: A larger down payment reduces the loan amount needed, lowering your monthly payments and potentially removing the need for Private Mortgage Insurance (PMI).
3. Interest Rates: Even a small increase in interest rates can significantly reduce your buying power. A 1% increase in rates can reduce your affordability by approximately 10%.
4. Property Taxes & Insurance: In areas with high property taxes, your monthly payment limit is eaten up faster, leaving less room for the actual mortgage principal, which lowers the total home price you can afford.
How to Improve Your Home Buying Power
If the results above are lower than you hoped, consider these strategies to improve your position before applying for a pre-approval: pay down high-interest consumer debt to lower your DTI, save for a larger down payment to reduce the loan-to-value ratio, or consider a longer loan term (like 30 years vs 15 years) to lower monthly obligations.