Mortgage Affordability Calculator
Find out how much house you can actually afford based on your income, debts, down payment, and the 28/36 debt-to-income rule lenders use to qualify buyers.
Maximum home price you can afford
—
Loan amount
—
Estimated monthly payment
—
Monthly payment breakdown
How lenders decide how much house you can afford
Mortgage lenders qualify buyers using debt-to-income (DTI) ratios — the share of your gross monthly income that goes toward debt. The classic rule is 28/36:
- Front-end DTI (28%) — your total housing payment (principal, interest, property taxes, insurance, and HOA — collectively called PITI) should be at most 28% of your gross monthly income.
- Back-end DTI (36%) — your housing payment plus all other monthly debt payments (car loans, student loans, credit-card minimums) should be at most 36% of gross income.
This calculator finds the highest home price where both rules hold. Whichever rule binds first is the one that caps your budget — the result above tells you which.
What the inputs mean
- Gross annual income — household pre-tax income. Use your reliable, documentable income (W-2 wages, salaried 1099 income). Don’t include bonuses you can’t count on.
- Monthly debt payments — the minimum required payments lenders see on your credit report. Utilities, groceries, and subscriptions don’t count.
- Down payment — cash at closing. Less than 20% on a conventional loan usually triggers private mortgage insurance (PMI), which this calculator does not model.
- Property tax rate — varies wildly by state, from ~0.3% (Hawaii) to over 2% (New Jersey, Illinois). Check your specific county.
- Homeowners insurance — entered as an annual % of home value. The US average is roughly 0.35%, but coastal and wildfire-prone areas run much higher.
- HOA dues — flat monthly fees for condos, townhomes, or planned communities.
Tip: Lowering your existing monthly debts (paying off a car loan, for example) often raises your housing budget faster than saving for a bigger down payment.
This is a planning tool, not a loan offer. Lenders also weigh credit score, employment history, cash reserves, and PMI, none of which are modeled here. Always get a pre-approval letter from a licensed lender before house-hunting. Not financial advice.
Before you fall in love with a listing, it helps to know your real number — not a rough guess, but the actual maximum home price a lender is likely to approve based on your income, existing debts, and down payment. That’s what this calculator gives you, using the same 28/36 debt-to-income framework most conventional mortgage lenders apply.
The two rules work like this. Your front-end DTI caps your total housing payment — principal, interest, property taxes, insurance, and HOA dues — at 28% of your gross monthly income. Your back-end DTI caps your housing payment plus all other monthly debt obligations at 36% of gross income. Whichever rule runs out of room first is the one that sets your ceiling, and the calculator tells you which one is limiting you.
Gross annual income — your household income before taxes. Use reliable, documentable income only. Bonuses and freelance income that can’t be verified on a tax return typically don’t count toward what a lender will use.
Monthly debt payments — the minimum required payments that show up on your credit report. Car loans, student loans, and credit card minimums count. Utilities, groceries, and subscriptions do not.
Down payment — cash you’re putting toward the purchase at closing. Note that putting down less than 20% on a conventional loan typically triggers private mortgage insurance (PMI), which this calculator does not include. Your actual monthly payment may be higher if PMI applies.
Mortgage interest rate — today’s 30-year fixed rates are roughly 6.5–7.5%. Even a half-point difference moves your maximum price by tens of thousands of dollars, so use a current rate from a lender or mortgage comparison site rather than guessing.
Property tax rate — this varies dramatically by location, from around 0.3% in Hawaii to over 2% in New Jersey and Illinois. The default here is 1.2%, close to the national average, but look up your specific county for accuracy.
Homeowners insurance — entered as an annual percentage of the home value, with a default of 0.35%. Coastal, hurricane-prone, and wildfire-risk areas often run significantly higher.
HOA dues — enter the flat monthly fee if you’re considering a condo, townhome, or planned community. Enter 0 if not applicable.
Front-end and back-end DTI limits — the defaults are 28% and 36%, which are the conventional lending standards. FHA loans sometimes allow slightly higher ratios, but 28/36 is the right starting point for planning purposes.
The monthly payment breakdown shows exactly how your housing budget splits across principal and interest, property taxes, insurance, and HOA. The gap between what the math allows and what feels comfortable in your budget is worth paying attention to — qualifying for a mortgage and affording one comfortably are two different things.
Not sure whether buying makes financial sense right now? The Rent vs Buy Calculator compares the true cost of both options over your expected time horizon.
Once you know your price range, use the Loan Payment Calculator to see exactly what your monthly principal and interest will be.
A home is typically your largest asset — track it alongside your other finances using the Net Worth Calculator.
This is a planning tool, not a loan pre-approval. Lenders also evaluate your credit score, employment history, cash reserves, and other factors not modeled here. Get a pre-approval letter from a licensed lender before house-hunting. This is not financial advice.