Home Affordability Calculator
Find out how much house you can realistically afford. This calculator applies the lender-standard 28/36 rule to your income, existing debts, and down payment — then factors in property taxes and insurance — to estimate a comfortable home price, loan amount, and monthly payment.
Formula reviewed for accuracy. Our methodology & sources
Home Affordability Calculator
mortgage calculator
How It Works
Enter your gross annual income, recurring monthly debt payments, down payment, and the current interest rate. The calculator caps your monthly housing cost at 28% of gross income and your total debt at your chosen DTI ratio (36% by default), takes the lower of the two, subtracts estimated taxes and insurance, and converts what remains into the home price and loan amount you can support.
Formula
Affordable PITI = min(28% × gross monthly income, DTI% × gross monthly income − monthly debts) Max Home Price = (Affordable PITI + Down Payment × M) / (M + t) Where: M = monthly principal & interest per $1 of loan, t = monthly tax + insurance rate
Examples
$90K income, $500/mo debts, $40K down at 6.5%
A typical single-income household with moderate existing debt.
$140K income, $0 debts, $80K down at 6.5%
A debt-free dual-income household with a larger down payment.
Frequently Asked Questions
What is the 28/36 rule?
It is a lending guideline: your monthly housing costs should stay at or below 28% of your gross monthly income (the front-end ratio), and your total monthly debt payments — housing plus car loans, student loans, and credit cards — should stay at or below 36% (the back-end ratio). This calculator uses the lower of the two limits.
Does this include property taxes and insurance?
Yes. The "Property Tax + Insurance" input estimates these as an annual percentage of the home value (1.7% is a common nationwide starting point). They are part of your true monthly payment, so the calculator subtracts them before working out the price you can afford.
Why is the bank willing to lend me more than this?
Lenders approve the maximum they can safely lend, often allowing back-end ratios of 43% or higher. That maximum leaves little room for savings, emergencies, or lifestyle. A comfortable budget is usually below the maximum you qualify for.
How much should my down payment be?
A larger down payment lowers your loan amount and monthly payment, and reaching 20% removes private mortgage insurance (PMI). Even so, affordability is driven mostly by income and existing debt, not just the down payment.
What costs does this calculator not include?
It estimates the recurring monthly payment, not one-time or variable costs like closing costs (typically 2–5% of the price), moving expenses, HOA fees, or ongoing maintenance (a common rule is ~1% of home value per year). Budget for these on top of the result.
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