$120k income, $800 debts, 20% down
- Max payment ≈ $2,000
- Mortgage ≈ $320k
- Home price ≈ $400k
finance calculator
Home Affordability Calculator
Estimate how much house you can afford based on income, debts, down payment, and estimated taxes/insurance.
Results
- Estimated max home price
- $487,237 USD
- Max mortgage amount
- $389,789 USD
How to use this calculator
- Enter income, monthly debt payments, down payment %, mortgage APR, monthly taxes/insurance, and term.
- We apply front-end (28%) and back-end (36%) DTI guidelines to find the max mortgage payment after taxes/insurance.
- Using the payment, APR, and term, we solve for max mortgage amount and gross up to the home price with your down payment.
Inputs explained
- Household annual income
- Gross annual income for all borrowers.
- Monthly debt payments
- Recurring debts (cards, loans, etc.) excluding housing.
- Down payment %
- Percent of the home price you plan to put down.
- Mortgage APR
- Expected mortgage rate.
- Taxes + insurance (monthly)
- Estimated monthly property tax and homeowners insurance.
- Loan term
- Mortgage term in years (e.g., 30 or 15).
How it works
We compare the 28% and 36% debt-to-income rules, subtract monthly taxes/insurance, then solve for the mortgage payment and principal.
Finally we gross up the mortgage by the down payment percentage to estimate the total purchase price.
Formula
Max payment = min(Income × 0.28, Income × 0.36 − monthly debts) − taxes/insurance Loan amount derived from amortization formula using the payment, APR, and term.
When to use it
- Sizing a pre-approval target before shopping for homes.
- Seeing how higher down payments or lower debts increase affordability.
- Testing rates and tax/insurance estimates on max price.
Tips & cautions
- Use conservative income and higher debt estimates for safety.
- Property taxes/insurance vary by area; adjust monthly estimate for target neighborhoods.
- Lenders may allow different DTI thresholds—this uses classic 28/36 rules for a conservative estimate.
- DTI guidelines vary by lender and loan type; this is a generic estimate.
- Does not include PMI/HOA dues—add them to taxes/insurance for a fuller picture.
- Assumes fixed-rate amortization; ARMs or interest-only loans behave differently.
Worked examples
Cut debts to $300/month
- Payment headroom improves
- Affordable home climbs to ≈ $440k
Deep dive
This home affordability calculator applies 28/36 debt-to-income rules to estimate max mortgage and home price. Enter income, debts, down payment %, rate, taxes/insurance, and term to see what fits your budget.
Use it to prep for pre-approval and test how rate, taxes, or debts affect affordability. Include HOA/PMI in the taxes/insurance field for a more complete monthly picture.
FAQs
- Can I change the DTI thresholds?
- This version uses the common 28/36 rule. Adjust inputs manually if your lender allows higher ratios.
- Does this include HOA dues?
- Add HOA payments to the taxes/insurance field so they reduce the available mortgage payment.
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For planning only. Lenders use additional factors (credit, assets) when approving mortgages.