Use this calculator to estimate how much house you can afford based on your income, debts, and down payment. This is a helpful tool to understand your potential mortgage borrowing capacity.
.calculator-container {
font-family: Arial, sans-serif;
border: 1px solid #ddd;
padding: 20px;
border-radius: 8px;
max-width: 500px;
margin: 20px auto;
box-shadow: 0 2px 4px rgba(0,0,0,0.1);
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.form-group {
margin-bottom: 15px;
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.form-group label {
display: block;
margin-bottom: 5px;
font-weight: bold;
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.form-group input[type="number"] {
width: calc(100% – 22px);
padding: 10px;
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border-radius: 4px;
box-sizing: border-box;
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button {
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border: none;
border-radius: 4px;
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font-size: 16px;
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button:hover {
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.result-container {
margin-top: 20px;
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border-radius: 4px;
text-align: center;
font-size: 1.1em;
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color: #333;
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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");
resultDiv.innerHTML = "; // Clear previous results
// Input validation
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) ||
annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate < 0 || loanTerm <= 0) {
resultDiv.innerHTML = 'Error: Please enter valid positive numbers for all fields.';
return;
}
// — Affordability Calculation Logic —
// A common rule of thumb is that your total monthly housing expenses (PITI – Principal, Interest, Taxes, Insurance)
// should not exceed 28% of your gross monthly income, and your total debt (including PITI) should not exceed 36% of your gross monthly income.
// We'll use the 36% DTI rule for a more conservative estimate of maximum loan amount.
var grossMonthlyIncome = annualIncome / 12;
var maxTotalMonthlyDebtAllowed = grossMonthlyIncome * 0.36;
var maxMonthlyMortgagePaymentAllowed = maxTotalMonthlyDebtAllowed – monthlyDebt;
if (maxMonthlyMortgagePaymentAllowed <= 0) {
resultDiv.innerHTML = 'Estimated Maximum Affordable Home Price: $0Based on your current debt obligations, you may not qualify for additional mortgage payments.';
return;
}
// Now, we need to find the maximum loan amount that results in this `maxMonthlyMortgagePaymentAllowed`.
// We'll use the mortgage payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// Where:
// M = Monthly payment
// P = Principal loan amount (what we want to find)
// i = monthly interest rate (annual rate / 12)
// n = total number of payments (loan term in years * 12)
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
// Rearranging the formula to solve for P:
// P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ]
var principalLoanAmount = 0;
if (monthlyInterestRate > 0 && numberOfPayments > 0) {
var numerator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
principalLoanAmount = maxMonthlyMortgagePaymentAllowed * (numerator / denominator);
} else if (monthlyInterestRate === 0 && numberOfPayments > 0) {
// Handle 0 interest rate case
principalLoanAmount = maxMonthlyMortgagePaymentAllowed * numberOfPayments;
}
var estimatedMaxHomePrice = principalLoanAmount + downPayment;
// Format the results
var formattedMaxHomePrice = estimatedMaxHomePrice.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedPrincipalLoanAmount = principalLoanAmount.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMonthlyMortgagePayment = maxMonthlyMortgagePaymentAllowed.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedGrossMonthlyIncome = grossMonthlyIncome.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedMaxTotalMonthlyDebtAllowed = maxTotalMonthlyDebtAllowed.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = `
Estimated Maximum Affordable Home Price: ${formattedMaxHomePrice}
This is based on a maximum debt-to-income ratio of 36%.
Estimated Maximum Loan Amount: ${formattedPrincipalLoanAmount}
Estimated Maximum Monthly Mortgage Payment (P&I): ${formattedMonthlyMortgagePayment}
(Does not include taxes, insurance, or HOA fees)
Assumptions Used:
Gross Monthly Income: ${formattedGrossMonthlyIncome}
Maximum Monthly Debt (incl. P&I): ${formattedMaxTotalMonthlyDebtAllowed}
Current Monthly Debt Payments: ${monthlyDebt.toLocaleString('en-US', { style: 'currency', currency: 'USD' })}
Max Monthly P&I Payment Allowed: ${maxMonthlyMortgagePaymentAllowed.toLocaleString('en-US', { style: 'currency', currency: 'USD' })}
Loan Term: ${loanTerm} Years
Annual Interest Rate: ${interestRate}%
`;
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial first step in the home-buying process. Lenders will assess your financial situation to determine how much they are willing to lend you. While lenders look at many factors, your income, existing debts, and the down payment you have saved are paramount. This mortgage affordability calculator provides an estimate based on common lending criteria.
Key Factors in Mortgage Affordability:
Annual Gross Income: This is the total income you earn before taxes and other deductions. Lenders use this as a primary indicator of your ability to repay a loan. Higher income generally means you can afford a more expensive home.
Total Monthly Debt Payments: This includes recurring monthly obligations such as car loans, student loans, credit card minimum payments, and any other loan payments you are required to make. Existing debt significantly impacts how much new debt (your mortgage) you can take on.
Down Payment: The upfront cash you pay towards the purchase price of the home. A larger down payment reduces the amount you need to borrow, which can lower your monthly payments and potentially help you qualify for a better interest rate. It also reduces the overall cost of the loan over time.
Interest Rate: The percentage charged by the lender for borrowing money. Even a small difference in the interest rate can significantly affect your monthly payment and the total interest paid over the life of the loan. This calculator uses an estimated annual interest rate.
Loan Term: The length of time you have to repay the mortgage, typically 15 or 30 years. A shorter loan term means higher monthly payments but less total interest paid. A longer term means lower monthly payments but more total interest paid.
How the Calculator Works:
This calculator uses a common guideline known as the Debt-to-Income (DTI) ratio. Lenders often look at two DTI ratios:
Front-end ratio: The percentage of your gross monthly income that goes towards housing expenses (Principal, Interest, Taxes, and Insurance – PITI).
Back-end ratio: The percentage of your gross monthly income that goes towards ALL monthly debt payments, including housing expenses.
This calculator focuses on the back-end ratio, specifically using a common threshold where total monthly debt (including the estimated mortgage payment) should not exceed 36% of your gross monthly income. It then works backward from the maximum allowable monthly mortgage payment to estimate the principal loan amount you could qualify for, and adds your down payment to estimate the maximum home price.
Important Considerations:
PITI: Remember that the estimated monthly mortgage payment calculated here typically only includes Principal and Interest (P&I). You will also have to pay property taxes, homeowner's insurance, and potentially Private Mortgage Insurance (PMI) or HOA fees. These will increase your actual total monthly housing cost.
Lender Specifics: Lenders may have different DTI requirements, credit score expectations, and other underwriting criteria. This calculator is an estimate and not a loan approval.
Closing Costs: You will also need funds for closing costs, which can range from 2% to 5% of the loan amount.
Market Conditions: Housing prices and interest rates are influenced by market conditions. Your actual purchasing power may vary.
It's always recommended to speak with a mortgage professional to get a pre-approval and a more precise understanding of your borrowing capacity.