How the Calculator Works:

Inputs Needed:
 Monthly Payment: The amount you are willing or able to pay monthly towards your mortgage.
 Example: $1,150.00
 Down Payment: The amount of money you plan to pay upfront for the home.
 Example: $15,000.00
 Mortgage Term: The duration of the loan in months or years.
 Example: 25 years (300 months)
 Interest Rate: The annual interest rate for the mortgage.
 Example: 5.57%
 Annual Taxes: The total property tax amount you expect to pay yearly.
 Example: $4,200.00
 Annual Insurance: The total property insurance amount you expect to pay yearly.
 Example: $820.00
 Monthly Payment: The amount you are willing or able to pay monthly towards your mortgage.

Formulas and Calculations:

Convert Mortgage Term to Months: If the term is given in years, it is converted to months:
$\text{Term (in months)} = \text{Term (in years)} \times 12$ Example: 25 years × 12 = 300 months

Monthly Interest Rate: Convert the annual interest rate into a monthly rate:
$\text{Monthly Rate} = \frac{\text{Interest Rate (\%)}}{12 \times 100}$ Example: 5.57% annual interest rate → Monthly Rate = 5.57 / (12 × 100) = 0.0046417

Monthly Taxes and Insurance: Calculate the monthly property tax and insurance payments:
$\text{Monthly Tax} = \frac{\text{Annual Taxes}}{12}$$\text{Monthly Insurance} = \frac{\text{Annual Insurance}}{12}$ Example:
 Monthly Tax = 4,200 / 12 = $350.00
 Monthly Insurance = 820 / 12 = $68.33
 Example:

Monthly Principal + Interest: The monthly payment excluding taxes and insurance:
$\text{Monthly Principal + Interest} = \text{Monthly Payment} – \text{Monthly Tax} – \text{Monthly Insurance}$ Example: $1,150.00 – $350.00 – $68.33 = $731.67

Calculate the Maximum Mortgage: Using the loan amortization formula:
$\text{maxMortgage} = \frac{\text{Monthly Principal + Interest} \times \left( (1 + \text{Monthly Rate})^\text{Term} – 1 \right)}{\text{Monthly Rate} \times (1 + \text{Monthly Rate})^\text{Term}}$
Example:
$\text{maxMortgage} = \frac{731.67 \times ((1 + 0.0046417)^{300} – 1)}{0.0046417 \times (1 + 0.0046417)^{300}}$Calculating stepbystep:
 $(1 + 0.0046417)^{300}$ is the compound factor over 300 months.
 Subtract 1 and multiply by the monthly principal + interest.
 Divide by the monthly rate multiplied by the compound factor.
This yields a maxMortgage of approximately $118,340.


Calculate Home Price: The total value of the house you can afford, including the down payment:
$\text{homePrice} = \text{maxMortgage} + \text{Down Payment}$ Example: $118,340 + $15,000 = $133,340


Output Table:
The results are displayed in a table format, showing:
 Home You Can Afford: This is the total home price you can afford.
 Example: $133,340
 Down Payment: The amount you pay upfront.
 Example: $15,000
 Approximate Mortgage You Need: The mortgage you need after accounting for the down payment.
 Example: $118,340
 Monthly Principal + Interest: The amount of your monthly payment allocated to principal and interest.
 Example: $731.67
 Monthly Tax: The portion of your monthly payment that goes towards taxes.
 Example: $350.00
 Monthly Insurance: The portion of your monthly payment that goes towards insurance.
 Example: $68.33
 Total Monthly Payment: The total monthly payment including principal, interest, taxes, and insurance.
 Example: $1,150.00
 Home You Can Afford: This is the total home price you can afford.
Example Calculation:
Suppose you input the following values:
 Monthly payment: $1,150
 Down payment: $15,000
 Mortgage term: 25 years
 Interest rate: 5.57%
 Annual taxes: $4,200
 Annual insurance: $820
Based on these values:
 The calculator determines a maximum mortgage of approximately $118,340.
 Adding the down payment gives a total home price of $133,340.
The results table breaks down the monthly payments and the loan amounts required.