Please fill in all required fields with valid numbers.
Estimated Maximum Home Price
$0
Max Monthly Payment:
$0
Loan Amount:
$0
*Calculation based on a conservative 28%/36% Debt-to-Income (DTI) ratio model.
How Much House Can You Really Afford?
Determining your budget is the single most important step in the home buying process. This Mortgage Affordability Calculator helps you estimate the maximum home price you can purchase based on your income, debts, and down payment. Unlike simple repayment calculators, this tool uses the standard Debt-to-Income (DTI) ratios that lenders actually use to qualify borrowers.
Understanding the 28/36 Rule
Most financial advisors and mortgage lenders utilize the "28/36 rule" to determine affordability:
Front-End Ratio (28%): Your estimated monthly housing costs (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income.
Back-End Ratio (36%): Your total monthly debt payments (housing costs + credit cards, student loans, car payments) should not exceed 36% of your gross monthly income.
Our calculator computes both ratios and uses the lower limiting factor to ensure you don't overextend your finances.
Factors Influencing Your Buying Power
Several key variables impact how much house you can afford:
Down Payment: A larger down payment reduces the loan amount required, allowing you to purchase a more expensive home for the same monthly payment. It may also help you avoid Private Mortgage Insurance (PMI).
Interest Rates: Even a small increase in interest rates can significantly reduce your buying power. Higher rates mean higher monthly interest costs, which lowers the principal amount you can borrow.
Existing Debt: High monthly obligations for cars or student loans reduce the room available in your back-end DTI ratio for a mortgage payment. Paying down debt can sometimes be more effective than saving for a larger down payment.
Property Taxes & Insurance: These recurring costs are part of your monthly payment (PITI). Homes in areas with high property taxes will reduce the maximum loan amount you can qualify for.
Improving Your Affordability
If the result from the calculator is lower than home prices in your target area, consider strategies to boost your affordability. Improving your credit score to qualify for lower interest rates, paying off high-interest consumer debt to free up monthly cash flow, or saving for a larger down payment can all substantially increase your maximum home price budget.
function calculateAffordability() {
// 1. Get Input Values
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebts = parseFloat(document.getElementById("monthlyDebts").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var propertyTax = parseFloat(document.getElementById("propertyTax").value);
var homeInsurance = parseFloat(document.getElementById("homeInsurance").value);
var hoaFees = parseFloat(document.getElementById("hoaFees").value);
// Handle optional/empty inputs by defaulting to 0 if NaN, except vital ones
if (isNaN(monthlyDebts)) monthlyDebts = 0;
if (isNaN(downPayment)) downPayment = 0;
if (isNaN(propertyTax)) propertyTax = 0;
if (isNaN(homeInsurance)) homeInsurance = 0;
if (isNaN(hoaFees)) hoaFees = 0;
// Validation for critical inputs
var errorDisplay = document.getElementById("errorDisplay");
if (isNaN(annualIncome) || isNaN(interestRate) || isNaN(loanTerm) || annualIncome <= 0 || loanTerm <= 0) {
errorDisplay.style.display = "block";
document.getElementById("results").style.display = "none";
return;
} else {
errorDisplay.style.display = "none";
}
// 2. Calculate Monthly Gross Income
var monthlyIncome = annualIncome / 12;
// 3. Define DTI Limits (28/36 Rule)
// Front-End Limit: 28% of income for Housing (PITI + HOA)
var maxHousingPaymentFront = monthlyIncome * 0.28;
// Back-End Limit: 36% of income for Total Debt (Housing + Other Debts)
var maxTotalDebtPayment = monthlyIncome * 0.36;
var maxHousingPaymentBack = maxTotalDebtPayment – monthlyDebts;
// 4. Determine Max Allowable Monthly Housing Payment
// It cannot exceed either limit.
var maxHousingPayment = Math.min(maxHousingPaymentFront, maxHousingPaymentBack);
// 5. Deduct Taxes, Insurance, and HOA to find Max Principal & Interest (PI)
var monthlyTax = propertyTax / 12;
var monthlyInsurance = homeInsurance / 12;
var nonMortgageHousingCosts = monthlyTax + monthlyInsurance + hoaFees;
var maxPrincipalAndInterest = maxHousingPayment – nonMortgageHousingCosts;
// Handle case where debts/taxes are too high
if (maxPrincipalAndInterest PV = P * (1 – (1 + r)^-n) / r
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var maxLoanAmount = 0;
if (monthlyRate === 0) {
maxLoanAmount = maxPrincipalAndInterest * numberOfPayments;
} else {
maxLoanAmount = maxPrincipalAndInterest * (1 – Math.pow(1 + monthlyRate, -numberOfPayments)) / monthlyRate;
}
// 7. Calculate Max Home Price
var maxHomePrice = maxLoanAmount + downPayment;
// 8. Format Output
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
document.getElementById("maxHomePrice").innerHTML = formatter.format(maxHomePrice);
document.getElementById("maxMonthlyPayment").innerHTML = formatter.format(maxHousingPayment);
document.getElementById("loanAmountResult").innerHTML = formatter.format(maxLoanAmount);
// Show Results
document.getElementById("results").style.display = "block";
}