Methodology
How MortgageClarity calculates scores, where the benchmarks come from, and what the tools cannot account for.
How Scores Are Calculated
Existing Loan — Mortgage Health Score
| Factor | Max | How it's calculated | Controllable? |
|---|---|---|---|
| Loan Progress | 25 | % of loan paid off compared to % of time elapsed | Within your control |
| Equity Position | 25 | Current loan-to-value ratio, banded against standard LTV thresholds (≤60%, ≤80%, ≤90%, ≤95%) | Within your control |
| Interest Efficiency | 25 | % of your current payment going to principal vs. interest | Time-based |
| Payoff Horizon | 15 | Years remaining relative to your original loan term | Time-based |
| Extra Payments | 10 | Extra monthly/yearly payments (saved from the Payoff Accelerator, or implied by your payment override) as a share of your scheduled payment — full points at 10% extra or more | Within your control |
Interest Efficiency and Payoff Horizon track how your loan naturally matures over time — they improve on their own as you make scheduled payments, and aren't something you can move day to day except indirectly, by paying extra (which is what the Extra Payments factor measures directly).
New Purchase — Affordability Score
| Factor | Max | How it's calculated | Controllable? |
|---|---|---|---|
| Housing Cost Ratio | 30 | Monthly payment (incl. taxes & insurance) as % of gross income, benchmarked to 28% | Within your control |
| DTI Ratio | 30 | Total monthly debt as % of gross income, benchmarked to 36% | Within your control |
| Down Payment | 20 | % of purchase price, scaled toward the 20% PMI-avoidance threshold | Within your control |
| Loan Term Choice | 10 | 15-year terms score higher than 30-year terms | Within your control |
| PMI Exposure | 10 | Full points if down payment ≥20% (no PMI required) | Within your control |
Every factor here is a decision you make before or at purchase — price, down payment, and term — so all of them are within your control.
Benchmarks & Sources
| Benchmark | Source | Link |
|---|---|---|
| 28% housing cost ratio | Consumer Financial Protection Bureau (CFPB) | cfpb.gov |
| 36% DTI rule | Fannie Mae Selling Guide | fanniemae.com |
| 20% down / PMI threshold | Freddie Mac guidelines | freddiemac.com |
| Amortization formula | Standard financial mathematics | Investopedia |
| Mortgage rate benchmarks | Freddie Mac Primary Mortgage Market Survey (PMMS) | freddiemac.com/pmms |
| Extra payment impact data | CFPB Owning a Home resources | consumerfinance.gov |
Limitations
What the app cannot account for:
- Local property tax rates
- Homeowner's insurance variation
- HOA fees
- Credit score impact on rate eligibility
- Lender-specific underwriting criteria
- Adjustable-rate mortgage (ARM) resets
- Points, origination fees, or closing costs
Not a Regulatory Authority
MortgageClarity is an independent informational tool and is not affiliated with, endorsed by, or operating under the authority of the CFPB, HUD, Fannie Mae, Freddie Mac, or any other government or regulatory body.