Use this calculator to estimate how much house you can afford based on your income, debts, and desired monthly payment.
.calculator-container {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ccc;
border-radius: 8px;
background-color: #f9f9f9;
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.calculator-inputs {
display: grid;
grid-template-columns: repeat(auto-fit, minmax(250px, 1fr));
gap: 15px;
margin-bottom: 20px;
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.input-group {
display: flex;
flex-direction: column;
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.input-group label {
margin-bottom: 5px;
font-weight: bold;
font-size: 0.9em;
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.input-group input {
padding: 8px;
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button {
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.calculator-result {
margin-top: 20px;
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color: #155724;
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text-align: center;
font-size: 1.1em;
font-weight: bold;
}
function calculateAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTerm").value);
var annualPropertyTaxes = parseFloat(document.getElementById("propertyTaxes").value);
var annualHomeInsurance = parseFloat(document.getElementById("homeInsurance").value);
var pmiPercentage = parseFloat(document.getElementById("pmi").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// — Input Validation —
if (isNaN(annualIncome) || annualIncome <= 0) {
resultDiv.innerHTML = "Please enter a valid Annual Household Income.";
return;
}
if (isNaN(monthlyDebt) || monthlyDebt < 0) {
resultDiv.innerHTML = "Please enter a valid Total Monthly Debt Payments.";
return;
}
if (isNaN(downPayment) || downPayment < 0) {
resultDiv.innerHTML = "Please enter a valid Down Payment.";
return;
}
if (isNaN(annualInterestRate) || annualInterestRate 20) {
resultDiv.innerHTML = "Please enter a valid Annual Interest Rate between 0% and 20%.";
return;
}
if (isNaN(loanTermYears) || loanTermYears 50) {
resultDiv.innerHTML = "Please enter a valid Loan Term between 1 and 50 years.";
return;
}
if (isNaN(annualPropertyTaxes) || annualPropertyTaxes < 0) {
resultDiv.innerHTML = "Please enter a valid Estimated Annual Property Taxes.";
return;
}
if (isNaN(annualHomeInsurance) || annualHomeInsurance < 0) {
resultDiv.innerHTML = "Please enter a valid Estimated Annual Homeowner's Insurance.";
return;
}
if (isNaN(pmiPercentage) || pmiPercentage 5) {
resultDiv.innerHTML = "Please enter a valid PMI percentage (0% to 5%).";
return;
}
// — Calculations —
// Lender typically allows PITI (Principal, Interest, Taxes, Insurance) to be 28% of gross monthly income
var maxMonthlyPiti = (annualIncome / 12) * 0.28;
// Lenders typically allow total debt (including PITI) to be 36% of gross monthly income
var maxTotalMonthlyObligations = (annualIncome / 12) * 0.36;
var maxMonthlyMortgagePayment = maxTotalMonthlyObligations – monthlyDebt;
// Use the lower of the two maximums for affordability
var affordableMonthlyPayment = Math.min(maxMonthlyPiti, maxMonthlyMortgagePayment);
if (affordableMonthlyPayment 0) {
maxLoanAmountPi = affordableMonthlyPayment * (1 – Math.pow(1 + monthlyInterestRate, -loanTermMonths)) / monthlyInterestRate;
} else {
// Handle 0% interest rate case
maxLoanAmountPi = affordableMonthlyPayment * loanTermMonths;
}
// — Adjust for Property Taxes, Insurance, and PMI —
var monthlyPropertyTaxes = annualPropertyTaxes / 12;
var monthlyHomeInsurance = annualHomeInsurance / 12;
// Calculate monthly PMI based on the potential loan amount
var monthlyPmi = (maxLoanAmountPi * (pmiPercentage / 100)) / 12;
// Subtract recurring costs (taxes, insurance, PMI) from the affordable monthly payment
var remainingForPrincipalAndInterest = affordableMonthlyPayment – monthlyPropertyTaxes – monthlyHomeInsurance – monthlyPmi;
if (remainingForPrincipalAndInterest 0) {
maxLoanAmountFinal = remainingForPrincipalAndInterest * (1 – Math.pow(1 + monthlyInterestRate, -loanTermMonths)) / monthlyInterestRate;
} else {
maxLoanAmountFinal = remainingForPrincipalAndInterest * loanTermMonths;
}
// Calculate the maximum home price
var maxHomePrice = maxLoanAmountFinal + downPayment;
// — Display Results —
var formattedMaxHomePrice = maxHomePrice.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
var formattedAffordableMonthlyPayment = affordableMonthlyPayment.toLocaleString(undefined, { style: 'currency', currency: 'USD' });
resultDiv.innerHTML = "Estimated Maximum Home Price You Can Afford: " + formattedMaxHomePrice + "";
resultDiv.innerHTML += "(Based on an estimated maximum monthly payment of " + formattedAffordableMonthlyPayment + ")";
resultDiv.innerHTML += "Note: This is an estimate. Actual loan approval depends on lender's underwriting, credit score, loan programs, and market conditions.";
}
Understanding Mortgage Affordability
Determining how much house you can afford is a crucial step in the home-buying process. It's not just about finding a house you like; it's about ensuring you can comfortably manage the monthly payments for years to come. Mortgage affordability calculators help you estimate your potential purchasing power by considering various financial factors.
Key Factors in Mortgage Affordability
Annual Household Income: This is the primary factor lenders consider. It represents the total income available to cover mortgage and other expenses.
Monthly Debt Payments: Lenders look at your existing financial obligations, such as credit card payments, car loans, and student loans. These are subtracted from your income to determine how much is left for a mortgage.
Down Payment: The amount of money you put down upfront affects the loan amount and, consequently, your monthly payments. A larger down payment generally leads to a smaller loan and lower monthly costs.
Interest Rate: Even a small difference in the interest rate can significantly impact your monthly payment and the total interest paid over the life of the loan. Rates depend on market conditions, your credit score, and the loan type.
Loan Term: This is the duration over which you agree to repay the loan, typically 15 or 30 years. Longer terms result in lower monthly payments but more interest paid overall.
Property Taxes: These are local taxes levied on real estate. They are an essential part of your total housing cost (PITI – Principal, Interest, Taxes, Insurance).
Homeowner's Insurance: This insurance protects your home against damage and liability. It's also a required component of your monthly housing payment.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's purchase price, lenders usually require PMI to protect themselves against default. This adds to your monthly payment.
How the Calculator Works
This calculator uses common lending guidelines to estimate your affordability:
Debt-to-Income (DTI) Ratio: Lenders typically have limits on your DTI ratio. A common guideline is that your total housing payment (PITI) should not exceed 28% of your gross monthly income, and your total debt obligations (including PITI) should not exceed 36% of your gross monthly income. This calculator calculates your maximum affordable monthly mortgage payment based on these ratios.
Calculating Maximum Loan Amount: Once the maximum affordable monthly payment is determined, the calculator subtracts estimates for monthly property taxes, homeowner's insurance, and PMI. The remaining amount is what you can theoretically afford for the principal and interest portion of your mortgage. Using this amount, along with the interest rate and loan term, the calculator estimates the maximum loan you can support.
Estimating Maximum Home Price: Finally, the estimated maximum loan amount is added to your down payment to provide an estimate of the maximum home price you may be able to afford.
Important Considerations
This calculator provides a helpful estimate, but it's not a loan approval. Factors like your credit score, employment history, savings, and the specific loan programs available will influence your actual borrowing capacity. It's always recommended to speak with a mortgage lender for a pre-approval and a more accurate assessment of your financial situation.