Please enter valid positive numbers for income, rate, and term.
Affordability Estimate
Maximum Home Price:–
Loan Amount:–
Monthly Mortgage Payment (P&I):–
Est. Monthly Tax & Insurance:–
Total Monthly Payment:–
How Much House Can You Afford?
Determining your home buying budget is a crucial first step in the real estate journey. This House Affordability Calculator uses the standard 28/36 rule utilized by most lenders to estimate your borrowing power based on your income, debts, and down payment.
Understanding the 28/36 Rule
Lenders look at two main debt-to-income (DTI) ratios when approving a mortgage:
Front-End Ratio (28%): Your projected monthly housing costs (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income.
Back-End Ratio (36%): Your total monthly debt payments (including the new mortgage plus existing debts like car loans, student loans, and credit cards) should not exceed 36% of your gross monthly income.
This calculator computes the maximum payment allowed under both ratios and uses the lower figure to ensure you stay within a safe financial limit.
Factors That Impact Affordability
Several variables can significantly change your purchasing power:
Interest Rates: A higher interest rate increases your monthly payment, reducing the total loan amount you can afford.
Down Payment: A larger down payment reduces the loan amount needed, allowing you to buy a more expensive home for the same monthly payment.
Property Taxes & HOA: High local taxes or Homeowners Association fees count directly against your monthly budget, lowering the amount available for the mortgage principal and interest.
Tips for Increasing Your Budget
If the results are lower than expected, consider paying down existing monthly debts to improve your back-end ratio, saving for a larger down payment, or shopping for competitive interest rates to maximize your purchasing power.
function calculateAffordability() {
// 1. Get Inputs
var annualIncome = parseFloat(document.getElementById('hacAnnualIncome').value);
var monthlyDebts = parseFloat(document.getElementById('hacMonthlyDebts').value);
var downPayment = parseFloat(document.getElementById('hacDownPayment').value);
var interestRate = parseFloat(document.getElementById('hacInterestRate').value);
var years = parseFloat(document.getElementById('hacLoanTerm').value);
var taxRateAnnual = parseFloat(document.getElementById('hacPropTaxRate').value);
var insuranceAnnual = parseFloat(document.getElementById('hacInsurance').value);
var hoaMonthly = parseFloat(document.getElementById('hacHoa').value);
var errorDiv = document.getElementById('hacErrorMessage');
var resultsDiv = document.getElementById('hacResults');
// 2. Validation
if (isNaN(annualIncome) || isNaN(interestRate) || isNaN(years) || annualIncome <= 0 || years Let's call the factor 'K'
// Taxes = (L + DownPayment) * monthlyTaxRate
// Equation: maxTotalMonthlyPayment = (L * K) + ((L + Down) * monthlyTaxRate) + monthlyInsurance + hoaMonthly
var r = (interestRate / 100) / 12;
var n = years * 12;
// Calculate Amortization Factor 'K'
var k = 0;
if (interestRate === 0) {
k = 1 / n;
} else {
k = (r * Math.pow(1 + r, n)) / (Math.pow(1 + r, n) – 1);
}
// Rearranging the equation to solve for L:
// maxTotalMonthlyPayment – monthlyInsurance – hoaMonthly – (Down * monthlyTaxRate) = L * (K + monthlyTaxRate)
var numerator = maxTotalMonthlyPayment – monthlyInsurance – hoaMonthly – (downPayment * monthlyTaxRate);
var denominator = k + monthlyTaxRate;
var maxLoanAmount = 0;
if (numerator > 0) {
maxLoanAmount = numerator / denominator;
} else {
maxLoanAmount = 0;
}
var maxHomePrice = maxLoanAmount + downPayment;
// Recalculate components for display based on derived Home Price
var finalPropTax = maxHomePrice * monthlyTaxRate;
var finalPI = maxLoanAmount * k;
var finalTotalPayment = finalPI + finalPropTax + monthlyInsurance + hoaMonthly;
// 4. Update UI
// Format currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
document.getElementById('hacResultPrice').innerHTML = formatter.format(maxHomePrice);
document.getElementById('hacResultLoan').innerHTML = formatter.format(maxLoanAmount);
document.getElementById('hacResultPI').innerHTML = formatter.format(finalPI);
document.getElementById('hacResultTaxIns').innerHTML = formatter.format(finalPropTax + monthlyInsurance + hoaMonthly);
document.getElementById('hacResultTotal').innerHTML = formatter.format(finalTotalPayment);
resultsDiv.style.display = 'block';
}