Buying a home is a significant financial decision, and understanding how much you can afford is a crucial first step. A mortgage affordability calculator helps you estimate the maximum loan amount you might qualify for, based on your income, debts, and estimated housing costs. This tool is designed to give you a ballpark figure, but remember that lenders will consider many other factors, including your credit score, down payment, employment history, and the specific property you wish to purchase.
This calculator considers your gross monthly income, your existing monthly debt payments, and your estimated monthly housing expenses (including principal, interest, taxes, and insurance). Lenders typically use debt-to-income (DTI) ratios to assess your ability to repay a loan. A common guideline is that your total monthly debt payments (including the new mortgage) should not exceed 43% of your gross monthly income. This calculator provides an estimate based on this principle.
To use the calculator, input your annual gross income, your total monthly debt payments (like credit cards, car loans, student loans), and an estimate for your monthly housing costs. The calculator will then provide an estimated maximum monthly mortgage payment and a corresponding estimated loan amount.
function calculateAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value);
var estimatedMonthlyHousing = parseFloat(document.getElementById("estimatedMonthlyHousing").value);
var interestRate = parseFloat(document.getElementById("interestRate").value) / 100;
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(estimatedMonthlyHousing) || isNaN(interestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
var grossMonthlyIncome = annualIncome / 12;
var maxTotalDebtPayment = grossMonthlyIncome * 0.43; // 43% DTI guideline
// Maximum allowable mortgage payment (PITI) based on DTI
var maxMonthlyMortgagePayment = maxTotalDebtPayment – monthlyDebt;
if (maxMonthlyMortgagePayment 0) {
maxLoanPrincipal = maxMonthlyMortgagePayment * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else {
// If interest rate is 0 (unlikely but for edge case)
maxLoanPrincipal = maxMonthlyMortgagePayment * numberOfPayments;
}
var estimatedMaxLoan = Math.round(maxLoanPrincipal);
resultDiv.innerHTML = "
Estimated Affordability:
";
resultDiv.innerHTML += "Gross Monthly Income: $" + grossMonthlyIncome.toFixed(2) + "";
resultDiv.innerHTML += "Maximum Total Monthly Debt Allowed (43% DTI): $" + maxTotalDebtPayment.toFixed(2) + "";
resultDiv.innerHTML += "Estimated Maximum Monthly Mortgage Payment (PITI): $" + maxMonthlyMortgagePayment.toFixed(2) + "";
resultDiv.innerHTML += "Estimated Maximum Loan Amount: $" + estimatedMaxLoan.toLocaleString() + "";
resultDiv.innerHTML += "Disclaimer: This is an estimate and not a loan approval. Lender approval depends on various factors including credit score, down payment, property type, and current market conditions.";
}