Home Affordability Calculator
Determine how much house you can afford based on your income, debts, and down payment. Uses standard debt-to-income ratios to calculate your maximum home price and monthly payment.
Your Financial Information
* Gross income is your total income before taxes and deductions
Include car loans, credit cards, student loans, etc.
Annual Rates (% of home value)
What You Can Afford
Monthly Payment Breakdown
Debt-to-Income Ratios
Tips to Improve Affordability
- • Increase your down payment to reduce loan amount
- • Pay down existing debts to improve debt-to-income ratio
- • Consider a longer loan term to reduce monthly payments
- • Shop for better interest rates from multiple lenders
- • Look for homes in areas with lower property taxes
How Home Affordability Is Calculated
The 28/36 Rule
This calculator uses the same starting point most lenders do: the 28/36 rule. The front-end ratio says your housing payment shouldn't eat more than 28% of your gross monthly income. The back-end ratio says all your debt payments combined - housing plus car loans, student loans, credit card minimums - should stay under 36%.
We run both calculations and use whichever gives the lower number. That's deliberately conservative. If you carry a lot of other debt, the back-end ratio will be the one holding your budget down, and paying off a car loan can free up more house than you'd expect.
What's Inside the Monthly Payment
A mortgage payment isn't just the loan. The full picture is often called PITI: principal, interest, property taxes, and homeowners insurance. If your down payment is under 20%, add private mortgage insurance (PMI) on top. Taxes and insurance are usually collected monthly into an escrow account, so they land in the same payment.
That's why the calculator asks for property tax, insurance, and PMI rates as a percentage of home value. In some counties, property taxes alone can swing your affordable price by tens of thousands of dollars - the house isn't the only thing you're paying for.
Getting to a Number You Can Live With
Lender-Approved Isn't the Same as Affordable
Lenders qualify you on gross income - before taxes, retirement contributions, health insurance, or any of the things that actually come out of your paycheck. They also don't know about daycare, aging parents, or that you'd like to keep traveling. Plenty of people get approved for a payment that technically fits the ratios but leaves nothing for everything else.
A useful gut check: take the maximum monthly payment this calculator shows and try living on the difference for a few months before you buy. Move the gap between your rent and that payment into savings. If it feels tight, buy below the maximum.
The Down Payment Question
Twenty percent down is the traditional target because it avoids PMI and gets you better rates, but it's not a requirement. Conventional loans can go as low as 3% down, and FHA loans start at 3.5%. The tradeoff is a bigger loan, a bigger payment, and PMI until you build enough equity. There's no single right answer - a smaller down payment that keeps your emergency fund intact often beats a bigger one that drains you to zero.
Costs the Mortgage Doesn't Cover
Closing costs typically run 2-5% of the loan amount, due at signing. After you move in, plan on spending roughly 1-2% of the home's value each year on maintenance and repairs - roofs, water heaters, and HVAC systems don't care about your budget. Then there's moving, furniture, window coverings, and the lawn mower you've never needed before.
Mistakes to Avoid
- • Shopping at your maximum price before getting rate quotes from multiple lenders
- • Ignoring property tax differences between neighborhoods
- • Emptying your savings completely for the down payment
- • Financing a car or opening new credit between pre-approval and closing
- • Skipping the inspection to win a bidding war
Frequently Asked Questions
How much house can I afford on my salary?
A rough rule of thumb is 2.5 to 3 times your gross annual income, but that ignores your debts, down payment, and local taxes. A debt-to-income calculation like this one is more accurate: keep housing under 28% of gross monthly income and total debt under 36%, and work backward to a price.
What is the 28/36 rule?
It's the lending guideline that housing costs should stay at or below 28% of your gross monthly income, and all debt payments combined should stay at or below 36%. Lenders may approve higher ratios, sometimes up to 43% or more, but 28/36 is the comfortable zone for most budgets.
Should I buy at the maximum amount I'm approved for?
Usually not. Approval is based on gross income and ignores your actual spending - retirement savings, childcare, and everything else. Buying 10-20% below your maximum leaves room for maintenance, rising taxes and insurance, and life changes without stretching every month.
How much should I put down on a house?
Twenty percent avoids PMI and lowers your payment, but many buyers put down less. Conventional loans allow as little as 3%, FHA loans 3.5%. Just don't drain your savings to get there - keep an emergency fund of at least three months of expenses after closing.
What is PMI and how do I avoid it?
Private mortgage insurance protects the lender when your down payment is under 20%. It typically costs 0.3-1.5% of the loan amount per year. You can avoid it with 20% down, or remove it later once you reach 20% equity through payments or appreciation - usually by requesting cancellation from your servicer.
Does my credit score affect how much house I can afford?
Significantly. A stronger score gets you a lower interest rate, and even half a percentage point changes your monthly payment enough to shift your affordable price range by thousands. If your score needs work, improving it before applying can be worth more than a bigger down payment.
What counts as monthly debt for the calculation?
Include car loans, student loans, personal loans, minimum credit card payments, and any child support or alimony obligations. Don't include utilities, groceries, phone bills, insurance premiums, or subscriptions - lenders only count recurring debt payments, not living expenses.
What costs should I plan for beyond the monthly payment?
Closing costs run about 2-5% of the loan, due upfront. Ongoing, budget roughly 1-2% of the home's value per year for maintenance and repairs, plus HOA dues if they apply. First-year extras like moving, furniture, and appliances add up fast, so leave a cushion.