Buying a home is one of the biggest financial decisions you'll make. Understanding how much mortgage you can realistically afford is crucial to avoid overextending yourself and ensure a comfortable homeownership experience. This Mortgage Affordability Calculator is designed to give you an estimated maximum loan amount you might qualify for, helping you set your home search budget.
Key Factors Influencing Affordability:
Annual Household Income: This is the primary factor lenders consider. Your combined income from all borrowers is the basis for determining repayment ability.
Total Monthly Debt Payments: Lenders look at your existing financial obligations, such as car loans, student loans, and credit card minimum payments. These are often factored into a Debt-to-Income (DTI) ratio. A lower DTI generally means you can afford a larger mortgage.
Down Payment: The amount you pay upfront significantly impacts your loan amount and potentially your interest rate. A larger down payment reduces the loan principal and can lead to better loan terms.
Interest Rate: Even a small difference in interest rate can have a substantial effect on your monthly payments and the total interest paid over the life of the loan. This calculator uses an estimated annual interest rate.
Loan Term: The length of the mortgage (e.g., 15, 20, 30 years) affects your monthly payment. Shorter terms have higher monthly payments but less total interest paid, while longer terms have lower monthly payments but more total interest paid.
How the Calculator Works (Simplified):
This calculator uses common lending guidelines to estimate affordability. While not a pre-approval, it considers a general guideline that your total monthly housing expenses (including principal, interest, taxes, and insurance – PITI) should not exceed a certain percentage of your gross monthly income, and your total debt obligations (including the new mortgage payment) should not exceed another percentage. For simplicity, this calculator focuses on the monthly payment aspect based on your income, existing debts, and loan parameters. A common rule of thumb is that your total monthly housing costs (PITI) should not exceed 28% of your gross monthly income, and your total monthly debt payments (including PITI) should not exceed 36% of your gross monthly income. This calculator estimates the maximum loan amount based on these principles and the provided inputs.
Example:
Let's say your Annual Household Income is $90,000. Your Total Monthly Debt Payments (excluding potential mortgage) are $400. You have a Down Payment of $25,000. You're looking at an Estimated Annual Interest Rate of 6.8% for a 30-year loan. The calculator will process these figures to estimate how much you might be able to borrow.
Disclaimer: This calculator provides an estimate only and is not a loan approval or financial advice. Actual mortgage affordability is determined by lenders based on a comprehensive review of your creditworthiness, income verification, assets, liabilities, and market conditions. Always consult with a mortgage professional for personalized guidance.
function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter positive values for income, interest rate, and loan term, and non-negative values for debt and down payment.";
return;
}
var grossMonthlyIncome = annualIncome / 12;
// Using common lending guidelines:
// 28% of gross monthly income for PITI (Principal, Interest, Taxes, Insurance)
// 36% of gross monthly income for total debt obligations (including PITI)
var maxPitiPayment = grossMonthlyIncome * 0.28;
var maxTotalDebtPayment = grossMonthlyIncome * 0.36;
// The maximum affordable mortgage payment is limited by whichever is lower:
// The PITI limit, OR the total debt limit minus existing monthly debt.
var affordableMortgagePayment = Math.min(maxPitiPayment, maxTotalDebtPayment – monthlyDebt);
if (affordableMortgagePayment 0 && numberOfPayments > 0) {
var numerator = Math.pow((1 + monthlyInterestRate), numberOfPayments) – 1;
var denominator = monthlyInterestRate * Math.pow((1 + monthlyInterestRate), numberOfPayments);
if (denominator > 0) {
maxLoanAmount = affordableMortgagePayment * (numerator / denominator);
}
} else if (monthlyInterestRate === 0 && numberOfPayments > 0) {
// Handle zero interest rate case (though unlikely for mortgages)
maxLoanAmount = affordableMortgagePayment * numberOfPayments;
}
var estimatedMaxLoan = maxLoanAmount;
var estimatedHomePrice = estimatedMaxLoan + downPayment;
// Rounding to nearest dollar for clarity
estimatedMaxLoan = Math.round(estimatedMaxLoan);
estimatedHomePrice = Math.round(estimatedHomePrice);
resultDiv.innerHTML = `