How to Calculate Interest Rate per Month on a Loan
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Mortgage Affordability Calculator
Determining how much house you can afford is a crucial first step in the home-buying process.
Our Mortgage Affordability Calculator helps you estimate the maximum mortgage amount you might
qualify for, based on your income, debts, and down payment. Understanding your borrowing capacity
allows you to set a realistic budget and focus your house search on properties within your
financial reach.
This calculator considers several key factors:
Gross Monthly Income: This is your income before taxes and other deductions. Lenders typically want your total housing costs (including mortgage principal and interest, property taxes, homeowner's insurance, and HOA fees) to be no more than 28% of your gross monthly income (this is known as the front-end ratio).
Total Monthly Debt Payments: This includes all your recurring monthly debt obligations, such as car loans, student loans, credit card minimum payments, and other loans. Lenders generally prefer your total monthly debt payments (including the estimated housing costs) to be no more than 36% of your gross monthly income (this is the back-end ratio).
Estimated Property Taxes: These are annual taxes levied by your local government based on the property's assessed value. We'll estimate this as a monthly amount.
Estimated Homeowner's Insurance: This is the annual cost of insuring your home against damage and liability. We'll estimate this as a monthly amount.
Estimated HOA Fees (if applicable): If you're buying a property in a community with a Homeowners Association, you'll have monthly or annual fees.
Estimated Down Payment: This is the upfront cash you'll pay towards the purchase price of the home. A larger down payment reduces the loan amount needed.
Estimated Interest Rate: This is the annual interest rate on your potential mortgage loan.
Loan Term (Years): This is the duration of your mortgage, typically 15 or 30 years.
By inputting these details, our calculator provides an estimated maximum mortgage amount. Remember,
this is an estimate, and your actual loan approval will depend on a lender's specific underwriting
criteria, credit score, and other financial factors.
Calculate Your Mortgage Affordability
30 Years
15 Years
function calculateMortgageAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var totalMonthlyDebt = parseFloat(document.getElementById("totalMonthlyDebt").value);
var annualPropertyTaxes = parseFloat(document.getElementById("annualPropertyTaxes").value);
var annualHomeownersInsurance = parseFloat(document.getElementById("annualHomeownersInsurance").value);
var monthlyHOA = parseFloat(document.getElementById("monthlyHOA").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(grossMonthlyIncome) || isNaN(totalMonthlyDebt) || isNaN(annualPropertyTaxes) ||
isNaN(annualHomeownersInsurance) || isNaN(monthlyHOA) || isNaN(downPayment) ||
isNaN(interestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
var maxHousingCostRatio = 0.28; // 28% for PITI (Principal, Interest, Taxes, Insurance)
var maxTotalDebtRatio = 0.36; // 36% for PITI + other debts
var maxMonthlyHousingPayment = grossMonthlyIncome * maxHousingCostRatio;
var maxTotalMonthlyDebtPayment = grossMonthlyIncome * maxTotalDebtRatio;
var maxMonthlyMortgagePaymentExcludingPITI = maxTotalMonthlyDebtPayment – totalMonthlyDebt;
// If the max total debt payment is less than existing debts, it's not affordable
if (maxTotalMonthlyDebtPayment < totalMonthlyDebt) {
resultDiv.innerHTML = "Based on your income and existing debts, you may not qualify for an additional mortgage based on the 36% back-end ratio.";
return;
}
var maxAllowedPITI = Math.min(maxMonthlyHousingPayment, maxMonthlyMortgagePaymentExcludingPITI);
var monthlyPropertyTaxes = annualPropertyTaxes / 12;
var monthlyHomeownersInsurance = annualHomeownersInsurance / 12;
var maxMonthlyPrincipalAndInterest = maxAllowedPITI – monthlyPropertyTaxes – monthlyHomeownersInsurance – monthlyHOA;
if (maxMonthlyPrincipalAndInterest 0) {
maxLoanAmount = maxMonthlyPrincipalAndInterest * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else {
maxLoanAmount = maxMonthlyPrincipalAndInterest * numberOfPayments; // No interest
}
var estimatedMaxHomePrice = maxLoanAmount + downPayment;
resultDiv.innerHTML = "
Estimated Affordability:
" +
"Maximum Monthly P&I Payment (Principal & Interest): $" + maxMonthlyPrincipalAndInterest.toFixed(2) + "" +
"Estimated Maximum Loan Amount: $" + maxLoanAmount.toFixed(2) + "" +
"Estimated Maximum Home Price (Loan + Down Payment): $" + estimatedMaxHomePrice.toFixed(2) + "";
}