Determining how much house you can afford is a crucial first step in the home-buying process. A mortgage affordability calculator helps you estimate the maximum loan amount you might qualify for, based on your income, debts, and other financial factors. This calculator takes into account your gross monthly income, recurring monthly debts, and your desired down payment to provide an estimated maximum mortgage amount.
Understanding your mortgage affordability can help you narrow down your home search to properties within your budget, preventing potential financial strain down the line. It's important to remember that this calculator provides an estimate, and your actual loan approval will depend on a lender's detailed review of your creditworthiness, income verification, and other underwriting criteria.
Mortgage Affordability Calculator
function calculateAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var monthlyDebtPayments = parseFloat(document.getElementById("monthlyDebtPayments").value);
var downPaymentAmount = parseFloat(document.getElementById("downPaymentAmount").value);
var estimatedInterestRate = parseFloat(document.getElementById("estimatedInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(grossMonthlyIncome) || isNaN(monthlyDebtPayments) || isNaN(downPaymentAmount) || isNaN(estimatedInterestRate) || isNaN(loanTermYears)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
// Using a common lender guideline: Debt-to-Income ratio (DTI) for housing should not exceed 28% of gross income,
// and total DTI (including all debts) should not exceed 36%.
// We'll use the total DTI guideline to estimate maximum PITI (Principal, Interest, Taxes, Insurance).
var maxTotalMonthlyPayment = grossMonthlyIncome * 0.36;
var maxMortgagePayment = maxTotalMonthlyPayment – monthlyDebtPayments;
if (maxMortgagePayment 0) {
var monthlyInterestRate = estimatedInterestRate / 100 / 12;
var loanTermMonths = loanTermYears * 12;
// Mortgage Payment Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where: M = Monthly Payment, P = Principal Loan Amount, i = Monthly Interest Rate, n = Number of Months
// We need to solve for P: P = M * [ (1 + i)^n – 1] / i(1 + i)^n
var numerator = Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths);
principalLoanAmount = estimatedMaxPIPayment * (numerator / denominator);
} else {
// If interest rate is 0, the loan amount is simply the total payment spread over the term
principalLoanAmount = estimatedMaxPIPayment * loanTermMonths;
}
var estimatedMaxLoanAmount = principalLoanAmount;
var estimatedMaximumHomePrice = estimatedMaxLoanAmount + downPaymentAmount;
resultDiv.innerHTML = `
Estimated Affordability
Estimated Maximum Monthly Housing Payment (PITI): $${maxMortgagePayment.toFixed(2)}
Estimated Maximum Principal Loan Amount: $${estimatedMaxLoanAmount.toFixed(2)}
Estimated Maximum Home Price (with your down payment): $${estimatedMaximumHomePrice.toFixed(2)}
Note: This is an estimate. Actual loan approval depends on lender underwriting, credit score, loan type, property taxes, homeowner's insurance, and HOA fees.
`;
}