Determine how much house you can realistically afford based on your income, debts, and current interest rates using standard debt-to-income (DTI) ratios.
(Credit cards, student loans, car loans, etc.)
30 Years
20 Years
15 Years
10 Years
(Property tax + Homeowners insurance / 12)
Your Affordability Estimate
Maximum Home Price–
Max Monthly Mortgage Payment
(Principal, Interest, Taxes, Insurance)
–
function calculateAffordability() {
// 1. Get Inputs
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 loanTermYears = parseInt(document.getElementById("loanTerm").value);
var estimatedTaxesAndInsurance = parseFloat(document.getElementById("estimatedTaxesAndInsurance").value);
// 2. Validate Inputs
if (isNaN(annualIncome) || annualIncome <= 0) { alert("Please enter a valid Gross Annual Income."); return; }
if (isNaN(monthlyDebts) || monthlyDebts < 0) { monthlyDebts = 0; }
if (isNaN(downPayment) || downPayment < 0) { downPayment = 0; }
if (isNaN(interestRate) || interestRate <= 0) { alert("Please enter a valid Interest Rate."); return; }
if (isNaN(estimatedTaxesAndInsurance) || estimatedTaxesAndInsurance < 0) { estimatedTaxesAndInsurance = 0; }
// 3. Define DTI Threshold (Using a conservative 36% back-end ratio standard)
var dtiRatio = 0.36;
// 4. Calculate Calculations
var monthlyGrossIncome = annualIncome / 12;
var maxTotalAllowableDebt = monthlyGrossIncome * dtiRatio;
var maxHousingPayment = maxTotalAllowableDebt – monthlyDebts;
// If debts are too high, affordability is zero
if (maxHousingPayment <= estimatedTaxesAndInsurance) {
document.getElementById("affordabilityResult").style.display = "block";
document.getElementById("maxHomePriceDisplay").innerHTML = "$0";
document.getElementById("maxMonthlyPaymentDisplay").innerHTML = "$0";
return;
}
var maxPrincipalAndInterest = maxHousingPayment – estimatedTaxesAndInsurance;
// Mortgage Loan Calculation (Reverse calculating loan amount from P&I)
var monthlyRate = (interestRate / 100) / 12;
var totalMonths = loanTermYears * 12;
// Formula: LoanAmount = P * (1 – (1 + r)^-n) / r
// Where P = maxPrincipalAndInterest, r = monthlyRate, n = totalMonths
var maxLoanAmount = maxPrincipalAndInterest * (1 – Math.pow(1 + monthlyRate, -totalMonths)) / monthlyRate;
var maxHomePrice = maxLoanAmount + downPayment;
// 5. Format and Display Results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
document.getElementById("affordabilityResult").style.display = "block";
document.getElementById("maxHomePriceDisplay").innerHTML = formatter.format(maxHomePrice);
document.getElementById("maxMonthlyPaymentDisplay").innerHTML = formatter.format(maxHousingPayment);
}
Understanding Mortgage Affordability
Determining "how much house can I afford" is the crucial first step in the home buying process. This calculator uses your financial picture to estimate a realistic home budget. It focuses on ensuring your future monthly mortgage payments are manageable alongside your existing financial obligations.
Key Factors Influencing Your Affordability:
Debt-to-Income (DTI) Ratio: Lenders use this ratio to measure your ability to manage monthly payments and repay debts. This calculator uses a conservative 36% "back-end" DTI, meaning your total monthly debts (including the new mortgage, property taxes, insurance, plus existing credit card bills, car loans, etc.) should not exceed 36% of your gross monthly income.
Down Payment: The more money you put down upfront, the less you need to borrow. A larger down payment increases your maximum home price for the same monthly payment amount.
Interest Rate: Even small changes in interest rates significantly impact affordability. A lower rate means a lower monthly payment for the same loan amount, or the ability to borrow more without increasing your monthly payment.
Taxes and Insurance: These are often overlooked costs that get bundled into your monthly mortgage payment (PITI: Principal, Interest, Taxes, Insurance). High property taxes in a specific area will reduce the amount of loan principal you can afford.
Example Scenario:
Imagine a household with a gross annual income of $90,000 and current monthly debt payments totaling $600 (e.g., a car payment and student loan). They have saved $50,000 for a down payment. Assuming a 30-year fixed mortgage at a 6.5% interest rate, and estimating monthly taxes and insurance at $400:
Using the 36% DTI rule, their total allowable monthly debt is $2,700 ($90k / 12 * 0.36). After subtracting existing debts ($600), they have $2,100 available for a total housing payment. Subtracting taxes and insurance ($400) leaves roughly $1,700 for principal and interest. Based on current rates, this would allow for a purchase price of approximately $318,000.
Note: This calculator provides an estimate. You should always consult with a qualified mortgage lender for pre-approval to get an exact figure based on your complete credit profile.