Your estimated maximum affordable mortgage payment will be shown here.
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the homebuying process. A mortgage affordability calculator helps estimate the maximum monthly mortgage payment you might qualify for, based on your financial situation. This is different from the total loan amount you can borrow; it focuses on the monthly payment that lenders will consider manageable for your income and existing financial obligations.
The key factors influencing your mortgage affordability are:
Annual Gross Income: This is your total income before taxes and deductions. Lenders typically use a guideline called the "front-end ratio" (or housing ratio) and the "back-end ratio" (or debt-to-income ratio). A common guideline suggests your total housing expenses (principal, interest, taxes, and insurance – PITI) shouldn't exceed 28% of your gross monthly income.
Existing Monthly Debt Payments: This includes all recurring monthly payments such as credit card minimums, car loans, student loans, and personal loans. Lenders use this to calculate your "back-end ratio" (or debt-to-income ratio), which typically shouldn't exceed 36-43% of your gross monthly income. This ratio covers all your monthly debt obligations, including your potential mortgage payment.
Down Payment: A larger down payment reduces the loan amount needed, which in turn lowers your monthly mortgage payment and can improve your chances of loan approval.
Interest Rate: This is the percentage charged by the lender on the loan. A lower interest rate means a lower monthly payment for the same loan amount.
Loan Term: This is the duration over which you agree to repay the loan, usually 15 or 30 years. A shorter loan term results in higher monthly payments but less total interest paid over the life of the loan.
Our calculator uses these inputs to provide an estimate of your affordable monthly mortgage payment. Remember, this is an estimate, and the actual amount you can borrow will depend on the specific lender's underwriting criteria, your credit score, property taxes, homeowners insurance costs, and other factors. It's always recommended to speak with a mortgage professional for personalized advice.
function calculateAffordability() {
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");
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) ||
annualIncome < 0 || monthlyDebt < 0 || downPayment < 0 || interestRate < 0 || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Guideline: Housing expenses (PITI) should not exceed 28% of gross monthly income
var maxHousingPaymentLimit = annualIncome / 12 * 0.28;
// Guideline: Total debt payments (including PITI) should not exceed 36% of gross monthly income
var totalDebtLimit = annualIncome / 12 * 0.36;
// Maximum affordable monthly PITI payment is limited by the lower of the two guidelines
var maxAffordablePITI = Math.min(maxHousingPaymentLimit, totalDebtLimit – monthlyDebt);
if (maxAffordablePITI < 0) {
maxAffordablePITI = 0; // Cannot have negative affordable payment
}
// Display the result
resultDiv.innerHTML = "Estimated Maximum Affordable Monthly Mortgage Payment (PITI): $" + maxAffordablePITI.toFixed(2) + "";
resultDiv.innerHTML += "(This is an estimate based on common lending guidelines. Actual approval may vary.)";
}