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Home Affordability Calculator

Find out how much house you can afford based on your income, debts, and down payment. Get a clear budget range for your home search.

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Yrs
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Maximum Home Price
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Estimated Monthly Payment$0
Principal & Interest$0
Property Tax$0
Home Insurance$0
Minimum Down Payment (20%)$0

How to Use This Calculator

Enter your annual household income (e.g., $120,000), your total monthly debt payments including car loans and credit cards (say $800), your desired down payment percentage (20%), the interest rate you expect to qualify for (6.5%), and the loan term (30 years). Click 'Calculate' to see the maximum home price you can afford, the required down payment amount, your estimated monthly payment, and the debt-to-income ratio — all using the standard 28/36 affordability rule.

About Home Affordability Calculator

The golden rule of home buying is that your monthly housing costs should not exceed 28% of your gross monthly income, and your total debt payments should stay under 36%. Those are the front-end and back-end ratios lenders use to qualify you for a mortgage. But knowing the math is one thing — applying it to your actual numbers is where most people get stuck.

This calculator works backwards from your income and existing debts to tell you the maximum home price you can realistically afford. It factors in property taxes, insurance, and your down payment so there are no surprises when you sit down with a lender. Keep in mind that just because a bank says you qualify for a $450,000 house doesn not mean it is a good idea. Your comfort zone might be lower — and this tool helps you find that number.

When to Use This Calculator

Use this calculator before you start house hunting so you know your realistic price range — this saves time and prevents the disappointment of falling in love with a home you can't afford. It's also valuable when getting pre-approved by a lender; compare what the bank says you qualify for vs what the calculator says is prudent. If interest rates change, revisit the calculator — a 0.5% rate increase can reduce your buying power by $20,000-$30,000. Use it alongside the mortgage calculator for full monthly cost projections.

How to Interpret Your Results

With $120,000 income, $800 monthly debts, 20% down, and 6.5% rate, you can afford approximately $420,000. That means 28% of your income ($2,800/month) goes to housing (principal, interest, taxes, insurance) and 36% total ($3,600/month) including other debts. Your monthly payment would be about $2,124 for principal and interest, plus taxes and insurance ($400-600), totaling around $2,600. The safe range requires $84,000 for the down payment plus $10,000-$15,000 for closing costs — the calculator helps you plan for all these numbers.

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Frequently Asked Questions

What is the 28/36 rule and should I follow it strictly?

The 28/36 rule says you should spend no more than 28% of gross monthly income on housing and no more than 36% on total debt (housing plus car loans, student loans, credit cards, etc.). It's a guideline, not a hard rule. In high-cost areas like New York or San Francisco, ratios of 35-40% are common. However, exceeding 36% on total debt significantly increases financial stress. Lenders may approve up to 43% (the Qualified Mortgage threshold), but that leaves little room for savings or unexpected expenses.

How does my down payment size affect affordability?

A larger down payment reduces your loan amount, eliminates private mortgage insurance (PMI) if you put down at least 20%, and often secures a lower interest rate. For example, on a $400,000 home, a 20% down payment of $80,000 means you finance $320,000 versus $360,000 with 10% down. The difference can save $200-400 per month in mortgage insurance and interest. However, depleting your emergency savings for a large down payment is risky — aim for at least 20% down while keeping 3-6 months of expenses in reserve.

What other costs should I consider beyond the mortgage payment?

Beyond principal and interest, budget for property taxes (typically 0.5-2.5% of home value annually), homeowners insurance (0.3-0.5% of home value), private mortgage insurance if under 20% down (0.5-1% of loan amount), maintenance and repairs (1-2% of home value annually), homeowners association fees if applicable, and closing costs (2-5% of purchase price). These additional costs can add 30-50% to your effective monthly housing payment, so a home with a $1,500 mortgage payment might actually cost $2,000-2,250 per month all-in.

How does my credit score affect what I can afford?

Your credit score directly impacts the mortgage interest rate you qualify for. A borrower with a 760+ credit score might get a 6.5% rate, while someone with a 620 score might pay 8% or higher. On a $350,000 loan, this difference of 1.5% amounts to roughly $350 more per month and over $125,000 in extra interest over 30 years. A higher credit score also gives you access to more loan programs and better terms. Check your credit report annually and address any errors before applying for a mortgage.

Can I afford a home if I have other debt payments?

Yes, but your other debt payments reduce the amount you can allocate to housing under the 36% total debt ratio. For example, if you earn $6,000 per month and have $500 in car and student loan payments, your maximum total debt payment is $2,160 (36%), leaving only $1,660 for housing instead of the full $1,680 (28%). Lenders prefer your debt-to-income ratio to stay under 43% for qualified mortgages. Paying down high-interest credit cards or student loans before house hunting can significantly increase your affordable price range.
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