How Do You Calculate Hourly Rate from Monthly Salary

by

Mortgage Affordability Calculator

Understanding how much you can afford for a mortgage is a crucial first step in the home-buying process. Our Mortgage Affordability Calculator helps you estimate your potential borrowing capacity based on your income, debts, and desired loan terms.

How it works: This calculator considers your gross monthly income and deducts your existing monthly debt payments. It then estimates the maximum monthly mortgage payment you can handle, factoring in a typical mortgage interest rate and loan term. Remember, this is an estimate, and lenders will have their own specific criteria and may consider other factors.

Key factors influencing affordability:

  • Gross Monthly Income: Your total income before taxes and other deductions.
  • Existing Monthly Debt Payments: This includes credit card payments, car loans, student loans, and any other recurring debt obligations.
  • Down Payment: The amount of money you'll pay upfront. A larger down payment generally means a smaller loan amount.
  • Interest Rate: The annual interest rate on the mortgage loan.
  • Loan Term: The number of years you'll take to repay the mortgage (e.g., 15, 30 years).

Use this calculator as a guide to set realistic expectations and to have a more informed conversation with your mortgage lender.











function calculateAffordability() { var grossIncome = parseFloat(document.getElementById("grossIncome").value); var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value); var downPayment = parseFloat(document.getElementById("downPayment").value); var annualInterestRate = parseFloat(document.getElementById("interestRate").value); var loanTermYears = parseFloat(document.getElementById("loanTerm").value); var resultDiv = document.getElementById("result"); resultDiv.innerHTML = ""; // Clear previous results if (isNaN(grossIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(annualInterestRate) || isNaN(loanTermYears) || grossIncome < 0 || monthlyDebt < 0 || downPayment < 0 || annualInterestRate < 0 || loanTermYears <= 0) { resultDiv.innerHTML = "Please enter valid positive numbers for all fields."; return; } // Assume a Debt-to-Income (DTI) ratio limit. A common guideline is 43%, but this can vary. // This is a simplified approach. Lenders use more complex metrics. var maxDtiRatio = 0.43; var maxMortgagePayment = (grossIncome * maxDtiRatio) – monthlyDebt; if (maxMortgagePayment 0) { var numerator = maxMortgagePayment * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1); var denominator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments); maxLoanAmount = numerator / denominator; } else { // Handle zero interest rate case (though unlikely for mortgages) maxLoanAmount = maxMortgagePayment * numberOfPayments; } var maxHomePrice = maxLoanAmount + downPayment; resultDiv.innerHTML = "Estimated Maximum Affordable Monthly Mortgage Payment: $" + maxMortgagePayment.toFixed(2) + ""; resultDiv.innerHTML += "Estimated Maximum Loan Amount: $" + maxLoanAmount.toFixed(2) + ""; resultDiv.innerHTML += "Estimated Maximum Home Purchase Price: $" + maxHomePrice.toFixed(2); }

Leave a Comment