Home Affordability Calculator
See the home price your income can support.
Car loans, credit cards, student loans, etc.
Estimated property taxes plus homeowner's insurance.
Max loan amount
- Max monthly payment (P&I)
- $1,790.00
Estimate using the 28/36 debt-to-income rule. Excludes down payment, taxes, and insurance from the loan figure.
How the home affordability calculator works
This tool answers a single question: given your income and existing debts, how large a mortgage can you support? It uses the lender standard known as the 28/36 rule, applied to your gross monthly income (pay before taxes).
Two caps run at the same time. The front-end ratio limits housing cost to 28 percent of gross income. The back-end ratio limits all debt payments combined to 36 percent. Housing cost here means PITI: principal and interest plus monthly taxes and insurance. The calculator solves each cap for the principal-and-interest (P&I) portion:
- Front-end P&I =
0.28 × gross − taxes/insurance - Back-end P&I =
0.36 × gross − other debts − taxes/insurance
Your max monthly P&I is the smaller of the two (never below zero). That payment is then run backward through the standard amortization formula to find the loan it supports. With monthly rate r and term n months, the affordable loan is Loan = M × (1 − (1 + r)^−n) / r, where M is the max P&I. When the rate is zero, the loan is simply M × n.
Worked example
Inputs: gross income 90,000 per year (7,500 per month), other monthly debts 400, monthly taxes and insurance 350, rate 6.5 percent, term 30 years (360 months).
| Step | Calculation | Result |
|---|---|---|
| Front-end P&I | 0.28 × 7,500 − 350 | 1,750.00 |
| Back-end P&I | 0.36 × 7,500 − 400 − 350 | 1,950.00 |
| Max monthly P&I | smaller of the two | 1,750.00 |
Monthly rate r |
6.5 ÷ 100 ÷ 12 | 0.0054167 |
| Max loan | 1,750 × (1 − 1.0054167^−360) / 0.0054167 | 276,868.93 |
The front-end cap binds here, so the affordable P&I is 1,750. At 6.5 percent over 360 months, that payment supports a loan of about 276,869. Add your down payment to estimate the purchase price.
How to use it
- Enter gross monthly income, not take-home pay. Divide annual salary by 12 if needed.
- Include every recurring debt in the debts field: car loans, student loans, and minimum credit card payments. Leave out groceries, utilities, and other variable spending.
- Estimate taxes and insurance for your target area. A common rough figure is property tax of 1 to 2 percent of home value per year plus homeowners insurance, divided by 12. Refine it once you have a specific property.
- Test a rate slightly above your quote to build in a cushion.
- Treat the output as a loan ceiling, then add your down payment to get the home price.
Limitations
This is an estimate, not a lending decision or professional advice. It does not account for private mortgage insurance, HOA dues, closing costs, the size of your down payment, your credit score, cash reserves, or program-specific rules (FHA, VA, and jumbo loans use different limits). Taxes and insurance vary widely by location and property, and lenders weigh factors beyond the two ratios. Use the result to set a realistic search range, then confirm with a lender preapproval before you shop in earnest.
Frequently asked questions
What income do I enter, gross or net?
Enter your gross monthly income, meaning your pay before taxes and deductions. Lenders qualify you on gross income because the 28/36 ratios are defined against it. If you only know your annual salary, divide it by 12 to get the monthly figure.
Why does my monthly debt lower the home price I can afford?
The back-end ratio caps your total monthly obligations (housing plus other debt) at 36 percent of gross income. Every dollar of car payment, student loan, or minimum credit card payment reduces the room left for a mortgage. Paying down or closing those balances before you apply directly raises your borrowing power.
Does this include my down payment?
No. The result is the maximum loan amount, not the home price. Add your down payment to the loan to estimate the purchase price you can support. For example, a 250,000 loan plus a 50,000 down payment points to roughly a 300,000 home.
What rate should I use if I have not been quoted one yet?
Use a current market rate for the loan type and term you expect, and check a rate sheet or lender quote for the day. A higher rate shrinks the loan a given payment can support, so it is worth testing a rate half a point above and below your estimate to see the range.
Can I change the 28 and 36 percent limits?
Yes. The 28/36 rule is the conventional default, but some loan programs allow higher ratios, and a strong credit profile or large reserves can stretch them. Adjust the front-end and back-end caps to match the guidelines your lender actually uses.