Buying a home is a significant financial decision, and understanding how much you can afford is the crucial first step. A mortgage affordability calculator helps you estimate the maximum loan amount you might qualify for, based on your income, existing debts, down payment, and current interest rates.
Key Factors in Mortgage Affordability:
Annual Household Income: This is the primary driver of your borrowing power. Lenders look at your total income from all reliable sources.
Total Monthly Debt Payments: This includes payments for other loans (car loans, student loans, personal loans), credit card minimums, and alimony or child support. These are often referred to as your "back-end debt-to-income ratio" (DTI).
Down Payment: The larger your down payment, the less you need to borrow, which can significantly impact your loan amount and monthly payments. A larger down payment also reduces the lender's risk.
Interest Rate: Even small changes in the interest rate can have a substantial impact on your monthly payment and the total interest paid over the life of the loan.
Loan Term: A longer loan term (e.g., 30 years) typically results in lower monthly payments but more interest paid overall compared to a shorter term (e.g., 15 years).
How the Calculator Works:
This calculator uses common lending guidelines to estimate your affordability. It generally considers that your total housing costs (principal, interest, taxes, insurance – often called PITI) should not exceed a certain percentage of your gross monthly income, and your total debt payments (including the estimated mortgage) should not exceed another higher percentage. It then works backward from these DTI ratios and the loan parameters to estimate the maximum loan amount. The calculator estimates a maximum loan amount and then derives the potential maximum home price by adding your down payment.
Disclaimer: This calculator provides an estimation for informational purposes only and does not constitute a loan offer or guarantee of approval. Actual loan amounts and terms will depend on a lender's specific underwriting criteria, your credit score, and other financial factors. It is always recommended to speak with a mortgage professional for personalized advice.
function calculateMortgageAffordability() {
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var monthlyDebt = parseFloat(document.getElementById("monthlyDebt").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) ||
annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var grossMonthlyIncome = annualIncome / 12;
// Using common DTI ratios: Front-end (housing) around 28%, Back-end (total debt) around 36%
// These are general guidelines and can vary significantly by lender.
var maxHousingPayment = grossMonthlyIncome * 0.28;
var maxTotalDebtPayment = grossMonthlyIncome * 0.36;
// Calculate the maximum allowable monthly mortgage payment (P&I only)
// Subtract existing monthly debt from the maximum total debt allowed
var maxMortgagePaymentAllowable = maxTotalDebtPayment – monthlyDebt;
// Ensure the calculated mortgage payment is not negative
if (maxMortgagePaymentAllowable 0) {
// Formula for maximum loan amount from monthly payment:
// M = P * [ i(1 + i)^n ] / [ (1 + i)^n – 1] => P = M * [ (1 + i)^n – 1] / [ i(1 + i)^n ]
maxLoanAmount = qualifyingMonthlyPayment * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else {
// If interest rate is 0%, loan amount is simply payment * number of payments
maxLoanAmount = qualifyingMonthlyPayment * numberOfPayments;
}
var maxHomePrice = maxLoanAmount + downPayment;
// Format results for display
var formattedMaxLoanAmount = maxLoanAmount.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedMaxHomePrice = maxHomePrice.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedQualifyingMonthlyPayment = qualifyingMonthlyPayment.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
resultDiv.innerHTML =
"