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Mortgage Affordability Calculator

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Your Estimated Affordability

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Recommended Monthly Payment: $0

Estimated Loan Amount: $0

*This estimate uses the 36% Debt-to-Income (DTI) rule-of-thumb and assumes standard property taxes and insurance.

Understanding Mortgage Affordability: How Much House Can You Really Afford?

When buying a home, the most critical question isn't just "What is the list price?" but "How much can I afford every month?" Our Mortgage Affordability Calculator helps you determine your home-buying power based on your unique financial profile, including income, existing debts, and current market interest rates.

The 28/36 Rule Explained

Financial experts and mortgage lenders often use the 28/36 rule to determine a borrower's creditworthiness. According to this guideline:

  • Front-End Ratio (28%): Your total housing expenses (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income.
  • Back-End Ratio (36%): Your total debt obligations, including your new mortgage and existing debts like car loans or student loans, should not exceed 36% of your gross monthly income.

Example Calculation

Suppose your household earns $100,000 annually. Your gross monthly income is approximately $8,333. Applying the 36% rule:

$8,333 x 0.36 = $3,000 maximum total monthly debt.

If you already have $500 in monthly student loan and credit card payments, your maximum mortgage payment (Principal, Interest, Taxes, Insurance) would be roughly $2,500. Our calculator takes this monthly limit and works backward using current interest rates to find the total home price you can afford.

Factors That Influence Your Home Buying Power

  1. Credit Score: A higher score unlocks lower interest rates, which significantly increases the loan amount you can afford for the same monthly payment.
  2. Down Payment: The larger your down payment, the lower your monthly loan obligation and the more expensive a home you can purchase without exceeding your monthly budget.
  3. Interest Rates: Even a 1% shift in interest rates can change your home-buying power by tens of thousands of dollars.
  4. Debt-to-Income (DTI): Lowering your existing monthly debts before applying for a mortgage is one of the fastest ways to increase your affordability.
function calculateAffordability() { var annualIncome = parseFloat(document.getElementById('annualIncome').value); var monthlyDebt = parseFloat(document.getElementById('monthlyDebt').value) || 0; var downPayment = parseFloat(document.getElementById('downPayment').value) || 0; var interestRate = parseFloat(document.getElementById('interestRate').value); var loanTermYears = parseInt(document.getElementById('loanTerm').value); if (isNaN(annualIncome) || isNaN(interestRate) || annualIncome <= 0 || interestRate <= 0) { alert("Please enter valid positive numbers for income and interest rate."); return; } // Calculation constants var monthlyIncome = annualIncome / 12; var maxTotalMonthlyDebt = monthlyIncome * 0.36; var maxMonthlyMortgagePayment = maxTotalMonthlyDebt – monthlyDebt; // Adjust for Taxes and Insurance (Estimating 15% of payment goes to escrow) var pAndIPayment = maxMonthlyMortgagePayment * 0.85; if (pAndIPayment <= 0) { alert("Based on your income and current debts, the calculated monthly allowance for a mortgage is zero or negative. Consider lowering debts or increasing income."); return; } var monthlyRate = (interestRate / 100) / 12; var numberOfPayments = loanTermYears * 12; // Present Value (PV) formula: PV = PMT * [(1 – (1 + r)^-n) / r] var loanAmount = pAndIPayment * ((1 – Math.pow(1 + monthlyRate, -numberOfPayments)) / monthlyRate); var totalHomePrice = loanAmount + downPayment; // Formatting numbers var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', maximumFractionDigits: 0 }); document.getElementById('maxHomePrice').innerText = formatter.format(totalHomePrice); document.getElementById('monthlyPayment').innerText = formatter.format(maxMonthlyMortgagePayment); document.getElementById('totalLoan').innerText = formatter.format(loanAmount); document.getElementById('resultsArea').style.display = 'block'; document.getElementById('resultsArea').scrollIntoView({ behavior: 'smooth' }); }

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