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Mortgage Affordability Calculator

Understanding how much you can afford for a mortgage is a crucial first step in the home-buying process. This calculator helps you estimate your maximum affordable mortgage payment based on your income, debts, and current interest rates. Remember, this is an estimate, and lenders will consider many other factors.

Understanding Mortgage Affordability

Your ability to afford a mortgage is largely determined by the "front-end" and "back-end" debt-to-income ratios (DTI). Lenders typically have limits for both.

  • Front-end DTI (Housing Ratio): This ratio compares your potential monthly housing costs (principal, interest, taxes, and insurance – PITI) to your gross monthly income. A common guideline is to keep this below 28%.
  • Back-end DTI (Total Debt Ratio): This ratio compares all your monthly debt payments (including your potential mortgage PITI) to your gross monthly income. A common guideline is to keep this below 36% to 43%, though some lenders may go higher.

This calculator estimates the maximum loan amount you might qualify for based on general DTI guidelines and then calculates a potential maximum monthly payment. It does not include property taxes, homeowner's insurance, or Private Mortgage Insurance (PMI), which will increase your actual monthly housing cost.

Important Considerations:

  • Income Verification: Lenders will verify your income thoroughly.
  • Credit Score: Your credit score significantly impacts interest rates and loan approval.
  • Loan Type: Different loan types (FHA, VA, Conventional) have different requirements.
  • Closing Costs: Factor in costs beyond the down payment, such as appraisal fees, title insurance, and loan origination fees.
  • Other Debts: Student loans, car loans, and credit card payments all factor into lender calculations.
  • Market Conditions: Local housing market conditions and lender policies can vary.

Consulting with a mortgage lender or broker is highly recommended for a personalized assessment of your borrowing capacity.

function calculateMortgageAffordability() { var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value); var estimatedMonthlyDebt = parseFloat(document.getElementById("estimatedMonthlyDebt").value); var downPayment = parseFloat(document.getElementById("downPayment").value); var annualInterestRate = parseFloat(document.getElementById("interestRate").value); var loanTermYears = parseFloat(document.getElementById("loanTermYears").value); var resultDiv = document.getElementById("result"); resultDiv.innerHTML = ""; // Clear previous results // Input validation if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0 || isNaN(estimatedMonthlyDebt) || estimatedMonthlyDebt < 0 || isNaN(downPayment) || downPayment < 0 || isNaN(annualInterestRate) || annualInterestRate <= 0 || isNaN(loanTermYears) || loanTermYears <= 0) { resultDiv.innerHTML = "Please enter valid positive numbers for all fields."; return; } // Assumptions based on common lender guidelines var maxFrontEndDTI = 0.28; // 28% for housing costs var maxBackEndDTI = 0.36; // 36% for total debt // Calculate maximum affordable monthly housing payment (PITI) var maxHousingPayment = grossMonthlyIncome * maxFrontEndDTI; // Calculate maximum total monthly debt payment allowed var maxTotalDebtPayment = grossMonthlyIncome * maxBackEndDTI; // Calculate maximum allowed monthly mortgage payment (P&I only) // This is the total allowed debt minus other existing debts var maxMortgagePaymentPI = maxTotalDebtPayment – estimatedMonthlyDebt; // Determine the actual limiting factor for the mortgage payment var affordableMonthlyMortgagePayment = Math.min(maxHousingPayment, maxMortgagePaymentPI); if (affordableMonthlyMortgagePayment 0) { // Mortgage payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1] // Where: M = Monthly Payment, P = Principal Loan Amount, i = Monthly Interest Rate, n = Loan Term in Months // Rearranging to solve for P: P = M [ (1 + i)^n – 1] / [ i(1 + i)^n ] maxLoanAmount = affordableMonthlyMortgagePayment * (Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths)); } else { // If interest rate is 0, loan amount is simply payment * term maxLoanAmount = affordableMonthlyMortgagePayment * loanTermMonths; } // Total potential home price (loan amount + down payment) var potentialHomePrice = maxLoanAmount + downPayment; resultDiv.innerHTML = `
Estimated Maximum Monthly Mortgage Payment (P&I): $${affordableMonthlyMortgagePayment.toFixed(2)} (This is an estimate for Principal & Interest only. Taxes, insurance, and PMI are additional.)
Estimated Maximum Loan Amount: $${maxLoanAmount.toFixed(2)}
Estimated Maximum Home Price You Could Afford (with your down payment): $${potentialHomePrice.toFixed(2)}
Based on these assumptions:
  • Front-end Debt-to-Income Ratio (Housing): <= 28%
  • Back-end Debt-to-Income Ratio (Total Debt): <= 36%
  • Loan Term: ${loanTermYears} years
  • Annual Interest Rate: ${annualInterestRate}%
  • Your Estimated Monthly Debt Payments (excl. mortgage): $${estimatedMonthlyDebt.toFixed(2)}
`; } .calculator-container { font-family: Arial, sans-serif; max-width: 700px; margin: 20px auto; padding: 20px; border: 1px solid #ddd; border-radius: 8px; background-color: #f9f9f9; } .calculator-container h2 { text-align: center; color: #333; margin-bottom: 15px; } .calculator-container p { line-height: 1.6; color: #555; margin-bottom: 15px; } .calculator-inputs { display: grid; grid-template-columns: repeat(auto-fit, minmax(250px, 1fr)); gap: 15px; margin-bottom: 20px; } .input-group { display: flex; flex-direction: column; } .input-group label { margin-bottom: 5px; font-weight: bold; color: #444; } .input-group input[type="number"] { padding: 10px; border: 1px solid #ccc; border-radius: 4px; font-size: 1rem; } .calculator-container button { display: block; width: 100%; padding: 12px 20px; background-color: #007bff; color: white; border: none; border-radius: 5px; font-size: 1.1rem; cursor: pointer; transition: background-color 0.3s ease; margin-bottom: 20px; } .calculator-container button:hover { background-color: #0056b3; } .calculator-result { margin-top: 20px; padding: 15px; border: 1px solid #e0e0e0; border-radius: 5px; background-color: #fff; } .calculator-result .result-item { margin-bottom: 10px; padding-bottom: 10px; border-bottom: 1px dashed #eee; } .calculator-result .result-item:last-child { border-bottom: none; margin-bottom: 0; padding-bottom: 0; } .calculator-result p { margin-bottom: 5px; color: #333; } .calculator-result .highlight { font-weight: bold; color: #28a745; font-size: 1.1rem; } .calculator-result ul { margin-top: 5px; padding-left: 20px; color: #555; } .calculator-explanation { margin-top: 30px; padding-top: 20px; border-top: 1px solid #eee; } .calculator-explanation h3 { color: #333; margin-bottom: 10px; } .calculator-explanation ul { list-style-type: disc; padding-left: 20px; line-height: 1.7; color: #555; }

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