Mortgage Affordability Calculator This calculator will help you determine how much home you can afford based on your income and down payment. Your Monthly Income: Down Payment: Monthly Debt Payments: Monthly Property Tax: Monthly Property Insurance: Interest Rate: Loan Term (in years): Your Maximum Affordability: function calculateAffordability() { // Get user input let monthlyIncome = document.forms["form"]["monthlyIncome"].value, downPaymentPct = document.forms["form"]["downPayment"].value, debtPayments = document.forms["form"]["debtPayments"].value, propertyTaxes = document.forms["form"]["propertyTax"].value, propertyInsurance = document.forms["form"]["propertyInsurance"].value, interestRatePct = document.forms["form"]["interestRate"].value, loanTerm = document.forms["form"]["loanTerm"].value; // Calculate mortgage affordability let downPayment = (parseFloat(downPaymentPct) / 100) * monthlyIncome, monthlyExpenses = parseFloat(debtPayments) + parseFloat(propertyTaxes) + parseFloat(propertyInsurance), interestRate = parseFloat(interestRatePct.slice(0, -1)) / 100, maxLoanAmount = (monthlyIncome - monthlyExpenses) * (1 - (interestRate / 12)) / ((interestRate / 12) * Math.pow(1 + (interestRate / 12), loanTerm * 12)), maxAffordability = downPayment + maxLoanAmount; // Set result document.forms["form"]["affordability"].value = "$" + maxAffordability.toLocaleString(); } window.onload = function() { calculateAffordability(); } window.oninput = function() { calculateAffordability(); } Are Mortgage Affordability Calculators Accurate? With the cost of purchasing a property today, it can be helpful to use mortgage affordability calculators to give you an idea of what you can afford. While they can be a great way to get a head start in the home buying process, it’s important to understand that they can be inaccurate. It’s critical to understand the potential pitfalls of using a mortgage affordability calculator, and how it can end up costing you money. Mortgage affordability calculators use the key factors of Loan-to-Value, Loan Amount, Interest Rate, and Term to give you a ballpark estimate on how much you can afford. They will also factor in any additional expenses such as taxes, insurance, and closing costs. While they can be useful to get an idea of where to start, it’s important to remember that these figures are just estimates, and not precise numbers. The biggest issue with using a mortgage affordability calculator is that you don’t know what the lending institution’s terms are. Different lenders can have different requirements for qualification, and this can drastically affect how much you can borrow. Another thing to consider is that the data that is being used in the calculation may not necessarily be up to date. Interest rates change often, and the calculator may not reflect the current market. One of the benefits of using a mortgage affordability calculator is that it eliminates some of the guesswork in the home buying process. You can input all of the necessary data, and it will do the calculations for you. You can also play around with the various loan amounts and terms to get an idea of the payments you’ll be making over the life of the loan. Additionally, it can be a useful tool in setting a budget for the home you can afford. Although mortgage affordability calculators can be a valuable tool in defining how much you can afford, it’s important to remember that they are just estimates. They do not take into account the current market, lender requirements, or any other potential costs that you might incur. The best way to get an accurate assessment is to speak with a lender and get their specific terms. It’s also important to remember that a mortgage affordability calculator can often give you false expectations. When you input certain data, it may suggest that you are able to afford more than you actually are. You need to be realistic and understand that it is just an estimate, and the final say rests with a lender who has all of the information on your financial history. In conclusion, mortgage affordability calculators can be useful in understanding the size of the loan you can afford. However, it’s important to understand that they are just estimations and not precise figures. The best way to know for sure how much of a loan you can get is to speak with a lender. The calculator will give you a good starting point, but you should always factor in the real numbers in order to make the most informed decision.