Understanding how much mortgage you can afford is a crucial first step in the home-buying process. Our Mortgage Affordability Calculator helps you estimate the maximum loan amount you might qualify for based on your income, debts, and estimated interest rate. This tool provides a good starting point for your financial planning, but remember that actual loan approval depends on a lender's specific underwriting criteria, including credit score, down payment, employment history, and other factors.
Key Factors to Consider:
Gross Monthly Income: This is your income before taxes and other deductions. Lenders often use a debt-to-income (DTI) ratio to assess your ability to repay a loan. A common guideline is that your total monthly debt payments (including the potential mortgage payment) should not exceed 43% of your gross monthly income.
Existing Monthly Debt Payments: This includes payments for credit cards, car loans, student loans, personal loans, and any other recurring debts. These obligations directly impact your DTI ratio.
Estimated Interest Rate: Mortgage interest rates fluctuate daily and depend on market conditions, your creditworthiness, and the loan term. A higher interest rate means a higher monthly payment for the same loan amount.
Loan Term (Years): The length of your mortgage (e.g., 15, 20, or 30 years). A longer term typically results in lower monthly payments but a higher total interest paid over the life of the loan.
Estimated Property Taxes and Homeowner's Insurance: These are often included in your monthly mortgage payment (known as PITI – Principal, Interest, Taxes, and Insurance). Lenders will factor these into your total housing cost.
Use this calculator to get a preliminary estimate. It's always recommended to speak with a mortgage professional to get a precise understanding of your borrowing power and available loan options.
Mortgage Affordability Calculator
Enter your financial details below to estimate your mortgage affordability.
function calculateMortgageAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var existingMonthlyDebt = parseFloat(document.getElementById("existingMonthlyDebt").value);
var estimatedInterestRate = parseFloat(document.getElementById("estimatedInterestRate").value) / 100;
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var estimatedTaxesAndInsurance = parseFloat(document.getElementById("estimatedTaxesAndInsurance").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(grossMonthlyIncome) || grossMonthlyIncome <= 0 ||
isNaN(existingMonthlyDebt) || existingMonthlyDebt < 0 ||
isNaN(estimatedInterestRate) || estimatedInterestRate <= 0 ||
isNaN(loanTermYears) || loanTermYears <= 0 ||
isNaN(estimatedTaxesAndInsurance) || estimatedTaxesAndInsurance = maxAffordableTotalDebtPayment) {
resultDiv.innerHTML = "Your existing monthly debt payments are too high to qualify for a mortgage based on standard DTI ratios.";
return;
}
// Calculate maximum allowed payment for principal and interest (P&I)
var maxAffordablePI = Math.min(maxAffordablePITI, maxAffordableTotalDebtPayment – existingMonthlyDebt);
// Ensure maxAffordablePI is not negative
if (maxAffordablePI 0) {
principalAmount = maxAffordablePI * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else {
// Handle case of 0 interest rate (unlikely for mortgages but good for robustness)
principalAmount = maxAffordablePI * numberOfPayments;
}
// Ensure principalAmount is not negative due to floating point inaccuracies or edge cases
if (principalAmount < 0) {
principalAmount = 0;
}
// Format the output
var formattedPrincipalAmount = principalAmount.toFixed(2);
var maxMonthlyPayment = (maxAffordablePI + estimatedTaxesAndInsurance).toFixed(2);
resultDiv.innerHTML =
"
Estimated Mortgage Affordability
" +
"Estimated Maximum Loan Amount: $" + formattedPrincipalAmount + "" +
"Estimated Maximum Total Monthly Housing Payment (PITI): $" + maxMonthlyPayment + "" +
"Based on a 28% housing expense ratio and 36% total debt-to-income ratio. This is an estimate; consult with a lender for pre-approval.";
}