Use this calculator to estimate if a desired home price is affordable based on your income, existing debts, and other housing-related expenses. It helps you understand your potential monthly housing costs and compares them against common affordability guidelines.
Affordability Results:
Your Maximum Affordable Monthly Housing Payment:
Estimated Monthly Housing Cost for Desired Home:
Affordability Status:
Estimated Maximum Affordable Home Price (based on your income/debt):
Breakdown for Desired Home:
Estimated Monthly Principal & Interest:
Estimated Monthly Property Tax:
Estimated Monthly Homeowners Insurance:
Other Monthly Housing Costs:
function calculateAffordability() {
var annualHouseholdIncome = parseFloat(document.getElementById('annualHouseholdIncome').value);
var monthlyDebtPayments = parseFloat(document.getElementById('monthlyDebtPayments').value);
var desiredHomePrice = parseFloat(document.getElementById('desiredHomePrice').value);
var downPaymentPercentage = parseFloat(document.getElementById('downPaymentPercentage').value);
var estimatedMortgageRate = parseFloat(document.getElementById('estimatedMortgageRate').value);
var mortgageTermYears = parseFloat(document.getElementById('mortgageTermYears').value);
var annualPropertyTaxRate = parseFloat(document.getElementById('annualPropertyTaxRate').value);
var annualHomeInsurance = parseFloat(document.getElementById('annualHomeInsurance').value);
var otherMonthlyHousingCosts = parseFloat(document.getElementById('otherMonthlyHousingCosts').value);
// Input validation
if (isNaN(annualHouseholdIncome) || annualHouseholdIncome < 0 ||
isNaN(monthlyDebtPayments) || monthlyDebtPayments < 0 ||
isNaN(desiredHomePrice) || desiredHomePrice < 0 ||
isNaN(downPaymentPercentage) || downPaymentPercentage 100 ||
isNaN(estimatedMortgageRate) || estimatedMortgageRate < 0 ||
isNaN(mortgageTermYears) || mortgageTermYears <= 0 ||
isNaN(annualPropertyTaxRate) || annualPropertyTaxRate < 0 ||
isNaN(annualHomeInsurance) || annualHomeInsurance < 0 ||
isNaN(otherMonthlyHousingCosts) || otherMonthlyHousingCosts < 0) {
document.getElementById('maxAffordableMonthlyPayment').innerText = 'Please enter valid numbers for all fields.';
document.getElementById('estimatedMonthlyHousingCost').innerText = '';
document.getElementById('affordabilityStatus').innerText = '';
document.getElementById('maxAffordableHomePrice').innerText = '';
document.getElementById('estimatedPrincipalInterest').innerText = '';
document.getElementById('estimatedMonthlyPropertyTax').innerText = '';
document.getElementById('estimatedMonthlyHomeInsurance').innerText = '';
document.getElementById('otherMonthlyHousingCostsBreakdown').innerText = '';
return;
}
var monthlyIncome = annualHouseholdIncome / 12;
// — Calculate Maximum Affordable Monthly Housing Payment (based on income/debt) —
// Rule 1: Housing costs (PITI + HOA) should not exceed 28% of gross monthly income (Front-end ratio)
var maxHousingPayment_28_percent = monthlyIncome * 0.28;
// Rule 2: Total debt payments (housing + other debts) should not exceed 36% of gross monthly income (Back-end ratio / DTI)
var maxTotalDebtPayment_36_percent = monthlyIncome * 0.36;
var maxHousingPayment_DTI = maxTotalDebtPayment_36_percent – monthlyDebtPayments;
// The lower of the two rules determines the maximum affordable housing payment
var maxAffordableMonthlyPayment = Math.min(maxHousingPayment_28_percent, maxHousingPayment_DTI);
if (maxAffordableMonthlyPayment 0 && monthlyInterestRate > 0) {
estimatedPrincipalInterest = mortgagePrincipal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else if (mortgagePrincipal > 0 && monthlyInterestRate === 0) { // Handle 0% interest rate
estimatedPrincipalInterest = mortgagePrincipal / numberOfPayments;
}
var estimatedMonthlyPropertyTax = (desiredHomePrice * (annualPropertyTaxRate / 100)) / 12;
var estimatedMonthlyHomeInsurance = annualHomeInsurance / 12;
var totalEstimatedMonthlyHousingCost = estimatedPrincipalInterest + estimatedMonthlyPropertyTax + estimatedMonthlyHomeInsurance + otherMonthlyHousingCosts;
// — Determine Affordability Status —
var affordabilityStatus;
if (totalEstimatedMonthlyHousingCost <= maxAffordableMonthlyPayment) {
affordabilityStatus = 'Affordable';
} else {
affordabilityStatus = 'Not Affordable';
}
// — Calculate Estimated Maximum Affordable Home Price —
// This is a reverse calculation based on the maxAffordableMonthlyPayment
// We need to isolate the P&I portion from the maxAffordableMonthlyPayment
var maxAffordablePITI = maxAffordableMonthlyPayment – otherMonthlyHousingCosts;
if (maxAffordablePITI 0) {
// This is a bit more complex as property tax and insurance are also based on home price.
// Let's simplify by assuming the P&I portion is the main driver for max home price,
// and then adjust for taxes/insurance as a percentage of the home price.
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
// P = M * [ (1 + i)^n – 1] / [ i(1 + i)^n ]
// Let's consider the total monthly cost as a function of HomePrice (HP):
// TotalMonthlyCost = (HP – DP_pct*HP) * P&I_Factor + (HP * Tax_Rate / 12) + (Insurance / 12) + OtherCosts
// MaxAffordableMonthlyPayment = HP * ( (1-DP_pct)*P&I_Factor + Tax_Rate/12 ) + Insurance/12 + OtherCosts
// MaxAffordableMonthlyPayment – Insurance/12 – OtherCosts = HP * ( (1-DP_pct)*P&I_Factor + Tax_Rate/12 )
// HP = (MaxAffordableMonthlyPayment – Insurance/12 – OtherCosts) / ( (1-DP_pct)*P&I_Factor + Tax_Rate/12 )
var monthlyInsuranceForMaxPrice = annualHomeInsurance / 12;
var effectiveMonthlyPaymentForPrincipalAndTaxes = maxAffordableMonthlyPayment – monthlyInsuranceForMaxPrice – otherMonthlyHousingCosts;
if (effectiveMonthlyPaymentForPrincipalAndTaxes > 0) {
var pAndIFactor = 0;
if (monthlyInterestRate > 0) {
pAndIFactor = (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else if (numberOfPayments > 0) {
pAndIFactor = 1 / numberOfPayments; // For 0% interest
}
var denominator = ((1 – (downPaymentPercentage / 100)) * pAndIFactor) + (annualPropertyTaxRate / 100 / 12);
if (denominator > 0) {
maxAffordableHomePrice = effectiveMonthlyPaymentForPrincipalAndTaxes / denominator;
}
}
}
// — Display Results —
document.getElementById('maxAffordableMonthlyPayment').innerText = '$' + maxAffordableMonthlyPayment.toFixed(2);
document.getElementById('estimatedMonthlyHousingCost').innerText = '$' + totalEstimatedMonthlyHousingCost.toFixed(2);
document.getElementById('affordabilityStatus').innerHTML = affordabilityStatus;
document.getElementById('maxAffordableHomePrice').innerText = '$' + maxAffordableHomePrice.toFixed(0); // Round to nearest dollar for home price
document.getElementById('estimatedPrincipalInterest').innerText = '$' + estimatedPrincipalInterest.toFixed(2);
document.getElementById('estimatedMonthlyPropertyTax').innerText = '$' + estimatedMonthlyPropertyTax.toFixed(2);
document.getElementById('estimatedMonthlyHomeInsurance').innerText = '$' + estimatedMonthlyHomeInsurance.toFixed(2);
document.getElementById('otherMonthlyHousingCostsBreakdown').innerText = '$' + otherMonthlyHousingCosts.toFixed(2);
}
// Run calculation on page load with default values
window.onload = calculateAffordability;
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Understanding House Affordability: More Than Just a Price Tag
Buying a home is one of the most significant financial decisions you'll ever make. While the sticker price of a house is important, true "affordability" goes far beyond that initial number. It encompasses your ability to comfortably manage all the ongoing costs associated with homeownership without straining your finances.
What Does House Affordability Really Mean?
House affordability refers to your capacity to purchase and maintain a home given your current income, existing debts, and other financial obligations. It's about ensuring that your monthly housing expenses don't consume too large a portion of your income, leaving you with enough funds for other necessities, savings, and discretionary spending.
Key Factors Influencing Affordability
Annual Household Income: This is your gross (pre-tax) income. Lenders and financial advisors use this as the primary benchmark to determine how much house you can afford.
Current Monthly Debt Payments: Any recurring debt payments, such as car loans, student loans, credit card minimums, and personal loans, directly impact your affordability. The more debt you have, the less income is available for housing.
Desired Home Purchase Price: The actual cost of the home you're considering.
Down Payment Percentage: The portion of the home's price you pay upfront. A larger down payment reduces the amount you need to borrow, lowering your monthly mortgage payments.
Estimated Mortgage Interest Rate: Even though this isn't a loan application, the prevailing interest rates significantly affect your monthly principal and interest payment, which is a major component of housing costs.
Mortgage Term (Years): The length of time you have to repay the mortgage. Longer terms (e.g., 30 years) typically mean lower monthly payments but more interest paid over the life of the loan.
Annual Property Tax Rate: Property taxes are a recurring cost based on your home's assessed value and local tax rates. They are usually paid monthly as part of your mortgage escrow.
Estimated Annual Homeowners Insurance: This protects your home against damage and liability. Like property taxes, it's often included in your monthly mortgage payment.
Other Monthly Housing Costs: These can include Homeowners Association (HOA) fees, estimated utility costs (electricity, gas, water, internet), and potential maintenance expenses. These are often overlooked but can add up significantly.
The 28/36 Rule: A Common Guideline
Financial experts and mortgage lenders often use the "28/36 rule" as a guideline for affordability:
28% Rule (Front-End Ratio): Your total monthly housing costs (including principal, interest, property taxes, and homeowners insurance – PITI, plus any HOA fees) should not exceed 28% of your gross monthly income.
36% Rule (Back-End Ratio / Debt-to-Income – DTI): Your total monthly debt payments (including your housing costs AND all other monthly debts like car loans, student loans, and credit card payments) should not exceed 36% of your gross monthly income.
This calculator uses a similar logic to determine your maximum affordable monthly housing payment, taking the more conservative of these two ratios to give you a realistic estimate.
How to Use This Calculator
Simply input your financial details and the specifics of the home you're considering into the fields above. The calculator will then:
Estimate your Maximum Affordable Monthly Housing Payment based on common financial guidelines.
Calculate the Estimated Monthly Housing Cost for your desired home, including an estimated mortgage payment, property taxes, insurance, and other costs.
Provide an Affordability Status, indicating whether the desired home appears affordable based on your inputs.
Suggest an Estimated Maximum Affordable Home Price, giving you a benchmark for what you might realistically be able to afford.
Important Considerations
This calculator provides an estimate and should be used as a guide. Your actual affordability may vary based on specific lender requirements, current market conditions, and your personal financial goals. Always consult with a financial advisor or mortgage professional for personalized advice.