Kbz Bank Interest Rate Calculator

Mortgage Affordability Calculator

Your Affordability Results

Estimated Max Home Price: $0

Estimated Monthly Payment (P&I): $0

*Based on a 36% Debt-to-Income (DTI) ratio limit.

function calculateMortgageAffordability() { var annualIncome = parseFloat(document.getElementById('annualIncome').value); var monthlyDebts = parseFloat(document.getElementById('monthlyDebts').value); var downPayment = parseFloat(document.getElementById('downPayment').value); var annualRate = parseFloat(document.getElementById('interestRate').value); var years = parseInt(document.getElementById('loanTerm').value); var taxIns = parseFloat(document.getElementById('taxesInsurance').value); if (isNaN(annualIncome) || isNaN(monthlyDebts) || isNaN(downPayment) || isNaN(annualRate) || isNaN(taxIns)) { alert("Please enter valid numbers in all fields."); return; } // 36% Debt-to-Income Rule is a common conservative benchmark var monthlyGrossIncome = annualIncome / 12; var maxAllowedMonthlyTotal = monthlyGrossIncome * 0.36; // Available for Principal & Interest (P&I) var availableForPI = maxAllowedMonthlyTotal – monthlyDebts – taxIns; if (availableForPI <= 0) { document.getElementById('affordabilityResult').style.display = "block"; document.getElementById('maxHomePrice').innerHTML = "Ineligible"; document.getElementById('monthlyPI').innerHTML = "$0"; return; } // Loan calculation formula: P = (A / i) * [1 – (1 + i)^-n] var monthlyRate = (annualRate / 100) / 12; var numberOfPayments = years * 12; var maxLoanAmount; if (monthlyRate === 0) { maxLoanAmount = availableForPI * numberOfPayments; } else { maxLoanAmount = availableForPI * (1 – Math.pow(1 + monthlyRate, -numberOfPayments)) / monthlyRate; } var maxHomePrice = maxLoanAmount + downPayment; document.getElementById('affordabilityResult').style.display = "block"; document.getElementById('maxHomePrice').innerHTML = "$" + Math.round(maxHomePrice).toLocaleString(); document.getElementById('monthlyPI').innerHTML = "$" + Math.round(availableForPI).toLocaleString(); }

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How Much House Can I Afford?

Determining your home buying budget is the most critical step in the real estate journey. While a bank might pre-approve you for a certain amount, understanding your personal mortgage affordability ensures you don't become "house poor." This calculator uses the standard 36% Debt-to-Income (DTI) rule to estimate a purchase price that keeps your finances balanced.

Understanding the 28/36 Rule

Lenders typically look at two primary ratios to determine how much they will lend you:

• The Front-End Ratio (28%): Your total housing costs (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income.
• The Back-End Ratio (36%): Your total debt obligations, including your new mortgage plus car loans, student loans, and credit cards, should not exceed 36% of your gross monthly income.

Our calculator focuses on the 36% ratio, as it provides a more holistic view of your financial health by accounting for existing monthly debts.

Factors That Influence Your Budget

1. Interest Rates: Even a 1% difference in interest rates can change your buying power by tens of thousands of dollars. Lower rates allow more of your monthly payment to go toward the principal.

2. Down Payment: The more you put down upfront, the lower your monthly loan obligation will be. A 20% down payment also helps you avoid Private Mortgage Insurance (PMI).

3. Credit Score: Your credit score directly impacts the interest rate lenders offer. A higher score typically unlocks lower rates, increasing your total affordability.

4. Property Taxes and Insurance: These vary significantly by location. Always research the local tax rates and insurance costs for the specific neighborhood you are targeting.

Example Affordability Scenario

Imagine a couple with a combined annual income of $100,000. Their monthly gross income is approximately $8,333. Using the 36% rule, their total monthly debt should stay under $3,000.

If they have $500 in car payments and $200 in student loans, they have $2,300 left for housing. After subtracting $500 for taxes and insurance, they can afford a monthly mortgage payment (P&I) of $1,800. At a 6.5% interest rate on a 30-year term, this supports a loan of roughly $284,000. If they have a $50,000 down payment, their maximum home price is $334,000.

Expert Tip: Always keep an "emergency fund" separate from your down payment. Unexpected repairs are a common reality for new homeowners.