Home Affordability Calculator

This home affordability calculator (also called a mortgage affordability calculator or "how much house can I afford calculator") estimates the maximum home price you can qualify for based on your income, debts, and down payment. It uses the same 28/36 DTI rules most lenders apply, so the output matches what a bank would pre-approve, not an optimistic estimate. Everything runs in your browser; change any input and the numbers update instantly.

1. Enter your annual gross income. Use your pre-tax salary plus reliable bonus or commission income. If you have a co-borrower, combine both incomes. Lenders verify this with W-2s, tax returns, or two recent pay stubs.
2. Enter your monthly debt payments. Include car loans, student loans, credit card minimums, personal loans, and any court-ordered child support or alimony. Skip utilities, subscriptions, and groceries; those are not part of the DTI formula.
3. Enter your down payment. A bigger down payment shrinks the loan and lowers the monthly payment. At 20% down, you skip private mortgage insurance (PMI); below that, PMI runs 0.5% to 1.5% of the loan per year.
4. Set the interest rate. Current 30-year fixed rates are around 6% to 7%. Check a live rate aggregator or your bank for today's number. Even a 0.5% rate change moves your max home price by roughly $25,000 on a $400,000 loan.
5. Choose the loan term. A 30-year loan has the lowest monthly payment and the most total interest. A 15-year loan cuts interest by more than half but raises the monthly payment by around 40%, which reduces the home price you can afford.
6. Add property tax, homeowners insurance, and HOA. Property tax averages 1.2% nationally but ranges from 0.3% (Hawaii) to 2.5% (New Jersey, Illinois). Insurance typically runs $100 to $250 a month. HOA fees apply to condos and planned communities and can easily be $200 to $500 a month.

The top result is the maximum affordable home price based on your inputs. The back-end DTI donut shows where you land against the 36% safe threshold. The PITI table breaks down principal and interest, property tax, insurance, and HOA so you can see what your total monthly housing cost would look like at that price. If the 36% back-end number is lower than the 28% front-end number, existing debts are the binding constraint; paying down a car loan or credit card will unlock more buying power.

Every house affordability calculator, including the one above, is built on three standard lending ratios and the standard mortgage payment formula. If you understand these four pieces, you can sanity-check any home loan calculator result by hand.

The 28/36 Rule (the core affordability test)

Max Monthly Housing (front-end) = Gross Monthly Income × 0.28
Max Total Monthly Debt (back-end) = Gross Monthly Income × 0.36

Budget for housing = Max back-end − existing debt payments

Affordable housing = min(front-end cap, back-end cap)

Example: $90,000 annual income, $450/mo in debts
Gross monthly = $7,500
Front-end cap = 7,500 × 0.28 = $2,100
Back-end cap  = 7,500 × 0.36 − 450 = $2,250
Housing budget = min($2,100, $2,250) = $2,100/mo

Front-End vs Back-End DTI

Front-end DTI only counts the housing payment. Back-end DTI counts housing plus every other debt on your credit report. Conventional loans cap back-end DTI at 43% to 45%, FHA loans allow up to 50% with compensating factors, and jumbo loans often want you under 38%. The calculator uses 28% front-end and 36% back-end because those are the conservative numbers most financial planners recommend.

PITI: What Actually Makes Up Your Monthly Payment

PITI = Principal + Interest + Taxes + Insurance

Principal & Interest = Loan × (r × (1+r)^n) ÷ ((1+r)^n − 1)
  where r = monthly rate, n = number of months

Taxes    = Home Price × (annual property tax rate ÷ 12)
Insurance = typically $100 to $250 per month
HOA       = $0 to $500+ per month (if applicable)

The calculator solves for the home price that makes PITI + HOA exactly equal to your housing budget. That is why a small tax-rate change (say 1.2% to 1.8%) can cut your max home price by $20,000 or more: taxes scale with the home price itself, unlike insurance and HOA which are roughly fixed.

Rent Affordability: The 30% Rule

Max Rent = Gross Monthly Income × 0.30

Example: $60,000 salary
Gross monthly = $5,000
Max rent = 5,000 × 0.30 = $1,500/mo

For a rent affordability calculator, the standard guidance is 30% of gross income on rent, with total housing costs (rent + renters insurance + utilities) kept under 35%. In expensive metros, many renters spend 40% to 50% of income on rent, which is survivable short-term but leaves nothing for savings or debt payoff.

Max Home Price by Income (Quick Reference)

Assumptions: 10% down, 7.0% rate, 30-year term, 1.2% property tax, 0.5% annual insurance ($150/mo on a $360K home), no HOA, no other debts. Real numbers vary with your specific debts, rate, and local taxes.

Rule of thumb: at current rates, max home price is roughly 3.0 to 3.2 times gross annual income with no other debts. Carrying a $500 monthly car payment or student loan knocks that down to about 2.6 to 2.8 times income.

A mortgage affordability calculator gives you a clean number. Actual homeownership is messier. This section covers the gaps between what the formula says you can afford, what a lender will approve, and what you should actually sign up for.

Why the 28/36 Rule Breaks in High-Cost Areas

The 28/36 rule was set in the 1970s when the median US home was about 2.5 times median income. Today it is roughly 5 times, and in California, New York, Massachusetts, and Hawaii it is 8 to 10 times. A $150,000 household income in San Francisco puts the 28% housing cap at $3,500 a month, which buys you almost nothing in that market. Buyers in expensive metros routinely push housing to 35% to 40% of gross income and back-end DTI to 45%, accepting a tight cash-flow picture in exchange for getting into the market at all. The tradeoff is real: less emergency savings, less retirement contribution, less flexibility if income drops.

What Lenders Approve vs What You Should Spend

Underwriters will often pre-approve you for a number 15% to 25% higher than the 28/36 result, especially on FHA loans that go up to 43% back-end DTI. That does not mean you should use it. The approval number assumes your debt profile stays exactly the same for 30 years and you never have a car repair, medical bill, or job loss. Most financial planners recommend buying at 80% to 85% of the maximum pre-approval so you keep room for 401(k) contributions, emergency savings, and life changes.

Hidden Costs Most Buyers Forget

The home loan calculator gives you PITI. Actual cash outflows include plenty more:

• Closing costs: 2% to 5% of the purchase price. On a $400,000 home, that is $8,000 to $20,000 at signing: loan origination, title insurance, appraisal, attorney fees, first-year property tax and insurance escrow.
• Maintenance: 1% to 4% of home value per year. A $400,000 house averages $4,000 to $16,000 a year in upkeep over its lifetime. Older homes and extreme climates land at the high end. Budget at least 1.5% per year; skipping this is the single biggest reason first-time owners feel house-poor.
• HOA fees: $200 to $700+ per month in condos, townhomes, and planned developments. HOAs can also pass special assessments ($5,000 to $30,000 one-time) for roof replacements, pool repairs, or reserve shortfalls.
• Moving and furnishing: $3,000 to $15,000. Movers, new appliances if the sellers take theirs, window treatments, a second set of everyday items for a larger space.
• Higher utilities. A 2,200 sq ft house costs 50% to 100% more to heat, cool, and power than a 1,000 sq ft apartment.

Down Payment Reality: FHA, VA, Conventional, and the 20% Myth

The "you need 20% down" advice is outdated for most first-time buyers. Here is what is actually available:

Why 20% down still beats PMI: on a $400,000 home at 7% with 5% down, you pay about $230 a month in PMI for 7 to 10 years, or roughly $20,000 to $28,000 total. Putting 20% down saves all of that, plus you start with $80,000 in equity instead of $20,000. The counter-argument: if the market appreciates 5% a year, waiting three years to save the extra 15% costs you roughly $60,000 in missed appreciation on a $400,000 home. Run your own numbers; there is no universal right answer.

Rent vs Buy: The 5 to 7 Year Break-Even

A rent affordability calculator and a home affordability calculator answer different questions, but the comparison matters. Buying has high fixed costs at entry (closing, furniture, maintenance) that are spread over how long you own the home. The break-even point, where total buying costs equal total renting costs, typically lands at 5 to 7 years in most US markets. In expensive coastal metros with low rent-to-price ratios, it can stretch to 10 or more years. In affordable Midwestern or Southern cities, it can be as short as 3 to 4 years.

If you are confident you will stay put for at least 5 years and your max affordable home is in a market with a normal rent-to-price ratio, buying usually wins. If you might move in 2 to 3 years, the transaction costs alone (6% realtor fee on sale, closing costs twice) almost always put renting ahead.