Mortgage Affordability Calculator
Understanding how much you can afford to borrow for a mortgage is a crucial first step in the home-buying process. This mortgage affordability calculator helps you estimate your potential borrowing power based on your income, existing debts, and desired down payment. It's important to remember that this is an estimate, and your actual borrowing capacity may vary based on lender policies, credit score, and other financial factors.
How Mortgage Affordability Works
Lenders typically assess your ability to repay a mortgage by looking at your Debt-to-Income (DTI) ratio. This ratio compares your total monthly debt payments (including the potential mortgage payment, property taxes, homeowner's insurance, and any existing loans or credit card payments) to your gross monthly income.
A common guideline is that your total housing costs (mortgage principal and interest, property taxes, homeowner's insurance, and HOA fees) should not exceed 28% of your gross monthly income (this is often called the "front-end DTI"). Additionally, your total debt payments (including housing costs) should not exceed 36% of your gross monthly income (the "back-end DTI"). This calculator helps you explore scenarios within these general guidelines.
Key Factors Influencing Affordability
- Gross Monthly Income: Your total income before taxes and deductions.
- Existing Monthly Debt Payments: This includes credit card minimum payments, student loan payments, car loans, and any other recurring debt obligations.
- Estimated Monthly Property Taxes: Taxes levied by your local government on the property.
- Estimated Monthly Homeowner's Insurance: The cost to insure your home against damage and liability.
- Estimated Monthly HOA Fees: If applicable, fees paid to a Homeowners Association.
- Interest Rate: The annual interest rate on the mortgage.
- Loan Term: The duration of the mortgage, typically 15 or 30 years.
- Down Payment: The upfront amount you pay towards the home purchase.
Use the calculator below to input your financial details and see an estimated maximum mortgage amount you might be able to afford. Remember to consult with a mortgage professional for personalized advice.
Your Estimated Mortgage Affordability
function calculateMortgageAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var existingMonthlyDebt = parseFloat(document.getElementById("existingMonthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var estimatedMonthlyTaxes = parseFloat(document.getElementById("estimatedMonthlyTaxes").value);
var estimatedMonthlyInsurance = parseFloat(document.getElementById("estimatedMonthlyInsurance").value);
var estimatedMonthlyHOA = parseFloat(document.getElementById("estimatedMonthlyHOA").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0 ||
isNaN(existingMonthlyDebt) || existingMonthlyDebt < 0 ||
isNaN(downPayment) || downPayment < 0 ||
isNaN(interestRate) || interestRate <= 0 ||
isNaN(loanTerm) || loanTerm <= 0 ||
isNaN(estimatedMonthlyTaxes) || estimatedMonthlyTaxes < 0 ||
isNaN(estimatedMonthlyInsurance) || estimatedMonthlyInsurance < 0 ||
isNaN(estimatedMonthlyHOA) || estimatedMonthlyHOA < 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Calculate maximum total housing payment based on 28% front-end DTI
var maxTotalHousingPayment = grossMonthlyIncome * 0.28;
// Calculate maximum total debt payment based on 36% back-end DTI
var maxTotalDebtPayment = grossMonthlyIncome * 0.36;
// Calculate the maximum allowable mortgage payment (P&I)
var maxMortgagePayment = maxTotalDebtPayment – existingMonthlyDebt;
// Ensure the maximum mortgage payment doesn't exceed the front-end DTI limit for housing costs
var allowableMortgagePayment = Math.min(maxMortgagePayment, maxTotalHousingPayment – estimatedMonthlyTaxes – estimatedMonthlyInsurance – estimatedMonthlyHOA);
if (allowableMortgagePayment 0) {
maxLoanAmount = allowableMortgagePayment * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else {
// Handle zero interest rate scenario (less common for mortgages but for completeness)
maxLoanAmount = allowableMortgagePayment * numberOfPayments;
}
var estimatedMaxHomePrice = maxLoanAmount + downPayment;
resultDiv.innerHTML =
"
Estimated Maximum Mortgage Loan Amount: $" + maxLoanAmount.toFixed(2) + "" +
"
Estimated Maximum Home Purchase Price: $" + estimatedMaxHomePrice.toFixed(2) + "" +
"
Note: This is an estimate. Actual loan amounts and home prices may vary based on lender approval, credit score, and other financial factors.";
}
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