Determining how much house you can afford is a crucial step in the home-buying process. This Mortgage Affordability Calculator helps you estimate your potential borrowing power based on your financial situation. It takes into account your income, existing debts, down payment, and the proposed mortgage terms.
How it Works:
Lenders typically 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 your proposed mortgage payment) should not exceed 28% of your gross monthly income (front-end DTI) and your total debt obligations (including credit cards, car loans, student loans, and the proposed mortgage) should not exceed 36% of your gross monthly income (back-end DTI). This calculator uses a simplified approach focusing on these DTI guidelines to provide an estimated maximum affordable loan amount.
Annual Income: This is your total gross income before taxes. Lenders will use this figure to determine your monthly income.
Monthly Debt Payments: This includes minimum payments on credit cards, auto loans, student loans, personal loans, and any other recurring debts, *excluding* your current rent or previous mortgage.
Down Payment: The amount of cash you plan to put towards the purchase price of the home. A larger down payment reduces the loan amount needed.
Annual Interest Rate: The yearly interest rate for the mortgage loan. This significantly impacts your monthly payment.
Loan Term: The number of years you will have to repay the mortgage loan. Common terms are 15 or 30 years. Longer terms result in lower monthly payments but higher total interest paid over the life of the loan.
Disclaimer: This calculator provides an estimate only and is not a loan approval or a guarantee of financing. Actual loan amounts and terms will depend on the lender's specific underwriting criteria, your credit score, property appraisal, and other factors. It is highly recommended to consult 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");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(annualIncome) || isNaN(monthlyDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (annualIncome <= 0 || monthlyDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTerm <= 0) {
resultDiv.innerHTML = "Please enter positive values for income, interest rate, and loan term, and non-negative values for debt and down payment.";
return;
}
// Calculate maximum PITI (Principal, Interest, Taxes, Insurance) based on 28% rule
var grossMonthlyIncome = annualIncome / 12;
var maxPITI = grossMonthlyIncome * 0.28;
// Calculate maximum total monthly debt payments based on 36% rule
var maxTotalMonthlyDebt = grossMonthlyIncome * 0.36;
// Maximum allowable mortgage payment (Principal + Interest) based on back-end DTI
var maxMortgagePayment = maxTotalMonthlyDebt – monthlyDebt;
// Ensure maxMortgagePayment is not negative (meaning current debt already exceeds 36% DTI)
if (maxMortgagePayment 0 && numberOfPayments > 0) {
affordableLoanAmount = affordableMonthlyMortgagePayment * (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1) / (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments));
} else if (affordableMonthlyMortgagePayment > 0) {
// Handle case where interest rate is 0% (though unlikely for mortgages)
affordableLoanAmount = affordableMonthlyMortgagePayment * numberOfPayments;
}
// Estimate total home price affordability
var estimatedMaxHomePrice = affordableLoanAmount + downPayment;
// Rounding for display
affordableMonthlyMortgagePayment = affordableMonthlyMortgagePayment.toFixed(2);
affordableLoanAmount = affordableLoanAmount.toFixed(2);
estimatedMaxHomePrice = estimatedMaxHomePrice.toFixed(2);
// Display results
resultDiv.innerHTML = "