Home Affordability Calculator
Find how much house you can afford based on your income, debt, down payment, and local tax rates — using standard lender DTI guidelines.
Did this tool work for you?
How to use this calculator
- 1
Enter your gross annual household income and the total of your existing monthly debt payments (car, student loans, card minimums).
- 2
Enter the down payment you have available, the mortgage rate, and property tax and insurance as yearly percentages of the home’s value.
- 3
The tool assumes a 30-year fixed loan and adds mortgage insurance of 1% of the loan per year when the down payment is under 20% of the price.
- 4
The result is the largest price, rounded down to the nearest $1,000, whose monthly payment fits both the 28% housing limit and the 43% total-debt limit built into the tool.
Frequently asked questions
What method does this tool use to find the maximum price?
This tool uses two limits on gross monthly income: housing may not exceed 28%, and housing plus your existing debts may not exceed 43%. The housing budget is the smaller of 28% of income and 43% of income minus your monthly debts. It then runs a 50-step search over prices up to $5,000,000 for the highest price whose principal and interest (30-year fixed), property tax, insurance and any mortgage insurance still fit that budget, and rounds the answer down to the nearest $1,000.
How is mortgage insurance handled?
If the loan is more than 80% of the price, the tool adds 1% of the loan amount per year, divided by twelve. A loan of exactly 80% has none. The charge is a flat rate and does not fall as you pay the loan down, so it will not match a real policy priced on credit score and loan-to-value.
What if my existing debts are large?
Debts come straight off the 43% allowance. If they use all of it, the tool shows a note that your debts exceed the limit instead of a price. If they leave only a little room the answer can be small: with $60,000 income, $2,000 of monthly debts and the default $50,000 down payment, the result is a $60,000 home because the 43% limit, not 28%, controls.
How are blank and zero inputs treated?
The boxes start at a 7% mortgage rate, 1.1% property tax and 0.5% insurance. Clearing one counts as 0, so a 0% tax or insurance rate removes that cost, and a 0% mortgage rate gives interest-free principal over 360 payments. Negative values are treated as zero. Zero income returns a $0 price.
Do the 28% and 43% limits match what a lender will use?
They are the figures built into this tool, chosen as common reference points, and a lender may apply different limits depending on loan program, credit and reserves. The two share lines in the results show where your payment actually lands: the housing share equals 28.0% when the housing limit controls and falls below that when your debts do.
What costs are not included in the payment?
HOA dues, maintenance, utilities, closing costs, points, FHA, VA or USDA fees, a 15-year or adjustable-rate loan, and any change in tax or insurance after purchase are not modelled. The down payment is whatever you enter and is not checked against the price or your savings.
Is the answer a recommendation of what to spend?
No. It is the highest price that fits two ratios under your assumptions. Many buyers choose to stay well under it, and the tool does not look at emergency savings, other goals or how secure your income is. Use it to see how rate, down payment and debts move the ceiling.
Home affordability: how a 28% and 43% limit turn into a price
From income to a housing budget
The tool converts annual income to a monthly figure, takes 28% of it as one limit and 43% of it minus your monthly debts as the other, and uses whichever is lower. That budget has to cover principal and interest on a 30-year fixed loan, property tax and insurance (each entered as a yearly percentage of the home’s value), and mortgage insurance when the loan is above 80% of the price. Because tax and insurance rise with the price, there is no simple formula, so the tool tries prices repeatedly until the payment just fits and then rounds down to the nearest $1,000.
Worked examples
With the defaults ($100,000 income, $500 of monthly debts, $50,000 down, 7%, 1.1% tax, 0.5% insurance) the maximum price is $307,000. The loan is $257,000 and the monthly payment is $2,333: $1,710 of principal and interest, $281 of tax, $128 of insurance and $214 of mortgage insurance. Housing is 28.0% of gross income and total debt including the $500 is 34.0%. Raise income to $150,000, debts to $1,200, down payment to $100,000, rate 6%, tax 0% and insurance 0.4%, and the maximum price becomes $584,000 with a $3,500 payment and a total-debt share of 37.6%.
Rate sensitivity
The table changes only the mortgage rate and keeps every other default. Because the housing limit is fixed at 28% of income, the payment barely moves between rows; the loan the same payment can support is what shrinks as the rate climbs, and the price falls with it.
| Mortgage rate | Maximum price | Loan amount | Monthly payment | Housing share of income |
|---|---|---|---|---|
| 5% | $350,000 | $300,000 | $2,327 | 27.9% |
| 6% | $327,000 | $277,000 | $2,328 | 27.9% |
| 7% | $307,000 | $257,000 | $2,333 | 28.0% |
| 8% | $288,000 | $238,000 | $2,329 | 27.9% |
When the debt limit takes over
In the default case the 28% housing limit is the binding one. When existing debts are heavy the 43% total limit binds instead, and the housing share can drop far below 28%. With $60,000 of income and $2,000 of monthly debts the tool returns a $60,000 price with a $10,000 loan, a payment of $147, a housing share of 2.9% and a total-debt share of 42.9%. Paying off or lowering a monthly obligation therefore lifts the price in that situation much more than a bigger down payment would.
What the maximum price leaves out
The figure is a ceiling set by ratios, not a budget. It does not include HOA dues, repairs, utilities, closing costs or points, and it assumes the tax and insurance percentages stay constant. Mortgage insurance is a flat 1% of the loan whatever your credit, and rounding down means the payment sits just under the limit. Lenders also look at credit, reserves and the property, none of which the tool can see, so a pre-approval can come out higher or lower.
Learn more from an authoritative source:
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →