Credit Interest Calculator

Estimate the home price you can comfortably afford based on your financial profile.

Your Financials

(Car loans, credit cards, student loans)

Loan Details

30 Years Fixed 20 Years Fixed 15 Years Fixed 10 Years Fixed

Estimated Affordability

Maximum Home Price

$0

Monthly Principal & Interest: $0

Total Monthly Payment: $0

Loan Amount: $0

Debt-to-Income Ratio: 0%

*Based on the 28/36 Debt-to-Income Rule. This is an estimate for educational purposes.

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 specific amount, understanding your personal comfort level with monthly payments is essential for long-term financial health.

The 28/36 Rule Explained

Most lenders use the "28/36 Rule" to determine mortgage eligibility:

• The 28% Rule: Your total monthly housing costs (mortgage principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income.
• The 36% Rule: Your total debt obligations (housing costs plus car loans, student loans, and credit card debt) should not exceed 36% of your gross monthly income.

Key Factors Influencing Your Budget

1. Gross Annual Income: Your total earnings before taxes are the foundation of your purchasing power.

2. Debt-to-Income (DTI) Ratio: High existing debts like student loans or car payments reduce the amount of monthly income available for a mortgage.

3. Down Payment: A larger down payment reduces the loan amount, which lowers your monthly interest and potentially eliminates Private Mortgage Insurance (PMI).

4. Current Interest Rates: Even a 1% difference in interest rates can shift your purchasing power by tens of thousands of dollars.

Affordability Example

If you earn $100,000 annually ($8,333/month) and have $500 in monthly debt:

• At 28%, your max housing payment is $2,333.
• At 36%, your max total debt is $3,000. Subtracting your $500 debt leaves $2,500 for housing.
• Lenders typically take the lower of these two, which is $2,333 per month for PITI (Principal, Interest, Taxes, and Insurance).

function calculateAffordability() { var annualIncome = parseFloat(document.getElementById('annualIncome').value) || 0; var monthlyDebt = parseFloat(document.getElementById('monthlyDebt').value) || 0; var downPayment = parseFloat(document.getElementById('downPayment').value) || 0; var interestRate = parseFloat(document.getElementById('interestRate').value) || 0; var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 30; var taxInsurance = parseFloat(document.getElementById('taxInsurance').value) || 0; if (annualIncome <= 0 || interestRate <= 0) { alert("Please enter a valid income and interest rate."); return; } var monthlyGrossIncome = annualIncome / 12; // 28/36 Rule Logic var housingLimit28 = monthlyGrossIncome * 0.28; var debtLimit36 = (monthlyGrossIncome * 0.36) – monthlyDebt; // The maximum PITI (Principal, Interest, Taxes, Insurance) allowed var maxPITI = Math.min(housingLimit28, debtLimit36); // Maximum amount available for just Principal and Interest var maxMonthlyPI = maxPITI – taxInsurance; if (maxMonthlyPI <= 0) { document.getElementById('maxHomePrice').innerText = "$0"; document.getElementById('resMonthlyPI').innerText = "$0"; document.getElementById('resTotalPayment').innerText = "$0"; document.getElementById('resLoanAmount').innerText = "$0"; document.getElementById('resDTI').innerText = "N/A"; return; } // Loan Calculation Formula: P = (PMT / r) * (1 – (1 + r)^-n) var periodicRate = (interestRate / 100) / 12; var numberOfPayments = loanTerm * 12; var loanAmount = maxMonthlyPI * (1 – Math.pow(1 + periodicRate, -numberOfPayments)) / periodicRate; var maxHomePrice = loanAmount + downPayment; // Calculate actual DTI for results var actualDTI = ((maxPITI + monthlyDebt) / monthlyGrossIncome) * 100; // Formatting var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', maximumFractionDigits: 0 }); document.getElementById('maxHomePrice').innerText = formatter.format(maxHomePrice); document.getElementById('resMonthlyPI').innerText = formatter.format(maxMonthlyPI); document.getElementById('resTotalPayment').innerText = formatter.format(maxPITI); document.getElementById('resLoanAmount').innerText = formatter.format(loanAmount); document.getElementById('resDTI').innerText = actualDTI.toFixed(1) + "%"; } // Initialize on load window.onload = calculateAffordability;