Home Affordability Calculator
Find out how much house you can afford based on your annual income, monthly debts, down payment, interest rate, and front-end and back-end debt-to-income ratio limits.
Home Affordability Formula
This calculator determines the maximum monthly housing payment you can afford using front-end and back-end debt-to-income (DTI) limits, then works backward through a mortgage amortization formula to estimate the maximum home price and loan amount.
Front-end DTI compares only housing costs (principal, interest, taxes, insurance, HOA — 'PITIA') to gross income, while back-end DTI compares all monthly debt payments (housing plus car loans, student loans, credit cards, etc.) to gross income. Conventional loans commonly cap back-end DTI around 36-43%, with some programs allowing up to 50% for well-qualified borrowers; front-end DTI is often capped around 28%. This calculator takes the more conservative (lower) of the two limits.
How to Use the Home Affordability Calculator
Enter your annual gross income
Use your total household income before taxes from all sources used for mortgage qualification.
Enter your monthly debt payments
Include minimum payments on car loans, student loans, credit cards, and any other recurring debts (not including rent).
Enter your down payment and loan terms
Add the cash you plan to put down, your expected interest rate, and loan term in years.
Enter estimated property tax rate, insurance, and HOA
These ongoing housing costs reduce how much loan payment you can afford and affect your maximum home price.
Adjust DTI limits if needed
The default front-end (28%) and back-end (36%) limits reflect common lender guidelines, but you can adjust them to match your specific loan program.
Click Calculate
View your maximum affordable home price, loan amount, and estimated monthly payment breakdown.
Real-World Scenario Example
"A household earning $100,000/year with $400/month in other debts plans a $40,000 down payment at 7% interest over 30 years, with a 1.2% property tax rate and $1,800/year insurance."
Inputs
Result
Based on a back-end DTI cap of 36%, the household can afford a maximum monthly housing payment of about $2,533, supporting a home price of roughly $325,000 with a loan amount near $285,000.
Important Disclaimer
This calculator provides estimates for educational and planning purposes only and does not constitute a mortgage pre-approval or loan offer. Actual affordability depends on lender-specific underwriting guidelines, credit profile, loan program, and verified income and debts. Consult a licensed mortgage lender for an accurate assessment.
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