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Mortgage Affordability Calculator

Determine maximum home price based on your income, debt-to-income ratios, and current mortgage rates.

Financial Inputs

(Car loans, student loans, credit cards, etc.)

Loan & Ratios

30 Years 20 Years 15 Years
(Total monthly debts / monthly gross income. Typically 36% – 43%)

Affordability Results

Maximum Home Price: $0

Maximum Monthly Housing Payment (PITI): $0

Based on a max loan amount of $0 plus your down payment.

Please enter valid numbers for all fields.

function calculateAffordability() { // Get inputs var annualIncome = parseFloat(document.getElementById("annualIncome").value); var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value); var downPayment = parseFloat(document.getElementById("downPaymentAvailable").value); var interestRate = parseFloat(document.getElementById("interestRate").value); var loanTermYears = parseInt(document.getElementById("loanTerm").value); var maxDTI = parseFloat(document.getElementById("backEndDTI").value); var taxAndInsurance = parseFloat(document.getElementById("estimatedTaxInsurance").value); var errorDiv = document.getElementById("errorMessage"); var resultDiv = document.getElementById("resultContainer"); // Basic validation if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTermYears) || isNaN(maxDTI) || isNaN(taxAndInsurance)) { errorDiv.style.display = "block"; resultDiv.style.display = "none"; return; } else { errorDiv.style.display = "none"; } // Calculations var monthlyGrossIncome = annualIncome / 12; // Calculate maximum total allowed monthly debt based on DTI var maxTotalMonthlyAllowed = monthlyGrossIncome * (maxDTI / 100); // Calculate max amount available for housing (PITI) after existing debts var maxHousingPaymentPITI = maxTotalMonthlyAllowed – monthlyDebt; // Ensure housing payment isn't negative if (maxHousingPaymentPITI < 0) maxHousingPaymentPITI = 0; // Calculate max amount available for Principal & Interest (PI) only var maxPIPayment = maxHousingPaymentPITI – taxAndInsurance; if (maxPIPayment < 0) maxPIPayment = 0; // Work backward to find loan amount based on Max PI payment var loanMonths = loanTermYears * 12; var monthlyRate = (interestRate / 100) / 12; var maxLoanAmount = 0; if (monthlyRate === 0) { maxLoanAmount = maxPIPayment * loanMonths; } else { // Reverse Amortization Formula: Loan = Payment / [ (r(1+r)^n) / ((1+r)^n – 1) ] var discountFactor = (Math.pow(1 + monthlyRate, loanMonths) – 1) / (monthlyRate * Math.pow(1 + monthlyRate, loanMonths)); maxLoanAmount = maxPIPayment * discountFactor; } var maxHomePrice = maxLoanAmount + downPayment; // Display Results resultDiv.style.display = "block"; // Currency formatting helper function var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', minimumFractionDigits: 0, maximumFractionDigits: 0, }); document.getElementById("maxHomePriceResult").innerText = formatter.format(maxHomePrice); document.getElementById("maxMonthlyPaymentResult").innerText = formatter.format(maxHousingPaymentPITI); document.getElementById("maxLoanAmountResult").innerText = formatter.format(maxLoanAmount); }

Understanding Home Mortgage Affordability

Before starting your home search, the most critical step is determining "How much house can I afford?" This isn't just about the purchase price; it's about understanding how lenders evaluate your financial health to determine the maximum monthly payment you can sustain. Our Mortgage Affordability Calculator uses standard lender metrics to provide a realistic estimate.

The Critical Role of Debt-to-Income (DTI) Ratios

The most important factor lenders use to determine affordability is your Debt-to-Income (DTI) ratio. Your DTI represents the percentage of your gross monthly income that goes toward paying debts.

  • Front-End Ratio (Housing Ratio): This is the percentage of your income that goes specifically toward housing costs (Principal, Interest, Taxes, and Insurance – PITI). Lenders typically prefer this to be under 28%.
  • Back-End Ratio (Total Debt Ratio): This is the critical metric used in this calculator. It includes your potential new housing payment plus all your current monthly debts (car payments, student loans, minimum credit card payments).

While conventional loans often prefer a back-end DTI no higher than 36%, some loan programs (like FHA) may allow DTIs up to 43% or even slightly higher with strong compensating factors like a high credit score or significant cash reserves.

Factors Influencing Your Results

Your Monthly Obligations

Existing debt significantly reduces your buying power. For example, a $400/month car payment directly reduces the amount of mortgage payment a lender will approve you for, potentially lowering your max home price by $60,000 or more depending on interest rates.

Interest Rates

The interest rate determines the cost of borrowing. A lower rate means more of your monthly payment goes toward principal, allowing you to borrow a larger total amount for the same monthly cost.

Down Payment

Your down payment is cash paid upfront. It does not affect the monthly payment calculation directly, but it is added on top of the maximum loan amount lenders approve. A larger down payment immediately increases your maximum purchase price.

Estimated Taxes and Insurance

Lenders don't just look at the mortgage principal and interest; they look at the total PITI (Principal, Interest, Taxes, Insurance). If you are looking in an area with high property taxes, your borrowing power for the actual home loan will decrease to accommodate those tax payments within your DTI limit.

Example Calculation

Let's assume a household has an annual gross income of $96,000 ($8,000/month). They have existing student loans and car payments totaling $600/month. They have saved $30,000 for a down payment. Assuming a 6.5% interest rate on a 30-year fixed mortgage and targeting a standard 36% total DTI.

  1. Max Total Debt Allowed: $8,000 income x 0.36 (DTI) = $2,880/month.
  2. Available for Housing (PITI): $2,880 (max allowed) – $600 (current debt) = $2,280/month.
  3. Loan Amount Calculation: If we estimate $400/month for taxes and insurance, that leaves $1,880 for Principal & Interest. At 6.5% over 30 years, a payment of $1,880 supports a loan of approximately $297,500.
  4. Max Price: $297,500 (Loan) + $30,000 (Down Payment) = $327,500 Estimated Max Home Price.

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