Home Affordability Calculator

Before you fall in love with a listing, it helps to know the ceiling. This affordability calculator applies lender debt-to-income guidelines to your income, debts, and down payment to estimate the maximum home price you can realistically support — and, just as importantly, the payment you can comfortably live with.

Inputs

$

Before taxes

$

Car, student loans, credit cards

$
%

Results

Max Home Price

$410,718

Conservative Estimate$369,646
Max Loan Amount$350,718
Max Monthly Payment$2,333
More details
Income Rule Limit$2,333/mo
Debt Rule Limit$2,500/mo

ℹ️ The limiting factor is the 28% housing expense rule. Lender approval depends on credit score, employment, and other factors.

How to Use

  1. 1Enter your annual gross income (before taxes; use combined income for joint applications).
  2. 2Add all existing monthly debt payments: car loans, student loans, minimum credit card payments.
  3. 3Enter how much you have saved for a down payment.
  4. 4Use your current mortgage rate quote or today's average.
  5. 5Your max home price and maximum monthly payment will appear instantly.

The 28/36 rule behind the number

Most conventional lenders evaluate two ratios. The front-end ratio caps total housing costs at about 28% of your gross monthly income, and the back-end ratio caps all recurring debt — housing plus car loans, student loans, and credit card minimums — at roughly 36%. Whichever limit is more restrictive for your situation becomes your true ceiling. If you carry significant other debt, the 36% back-end rule will bind before the housing rule does.

Lenders use gross (pre-tax) income, but your budget lives on take-home pay. A payment that qualifies on paper can still feel tight after taxes, retirement contributions, and everyday expenses. Many financial planners suggest targeting 25% or less of gross income for housing to leave room for saving and emergencies, especially in a high-rate environment.

Beyond the mortgage: the hidden costs of ownership

The maximum price this tool shows reflects the loan you can qualify for, not the full cost of owning. Budget an additional 1–2% of the home's value each year for maintenance and repairs, plus property taxes, insurance, and any HOA dues. On a $400,000 home, that maintenance reserve alone is $4,000–$8,000 annually.

A practical strategy is to buy at 80–90% of your calculated maximum. That margin absorbs rate changes, unexpected repairs, and life events without pushing your finances to the edge. The goal is a home you can enjoy, not one that consumes every spare dollar.

Frequently Asked Questions

What is the 28/36 rule?+

Lenders use the 28/36 rule as a guideline: your housing costs should not exceed 28% of your gross monthly income, and total debt payments should not exceed 36%. Staying within these limits helps ensure loan approval and financial stability.

Should I buy the maximum I can afford?+

Not necessarily. Buying at your maximum leaves no buffer for repairs, job changes, or rate adjustments. Many financial advisors recommend buying at 80–90% of your maximum to maintain financial flexibility.

Does my credit score affect affordability?+

Absolutely. A higher credit score (740+) unlocks lower interest rates, which significantly increases your buying power. Improving your score by 50 points could lower your rate by 0.25–0.5%, adding tens of thousands in purchasing power.

What about property taxes and insurance?+

The 28% housing expense rule includes PITI: principal, interest, taxes, and insurance. If you estimate $500/month for taxes and insurance, reduce your monthly principal+interest limit accordingly.

Can I get approved with higher DTI?+

Some loan programs (FHA allows up to 43–50% DTI with compensating factors, VA has no hard limit) may approve higher debt ratios. However, staying within the 36% guideline gives you the most loan options at the best rates.

This calculator is for informational purposes only and does not constitute financial, legal, or tax advice. Consult a qualified professional before making real estate or financial decisions.