Home Affordability Calculator

How much house can you afford? Enter your gross monthly income, existing debts, down payment, and mortgage rate to calculate your maximum home price using standard lender qualifying ratios.

Your Home Affordability Estimate

              Max Home Price
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              Monthly Payment (P&I)
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Max Loan Amount —

Down Payment % —

Front-End DTI (Housing) —

Back-End DTI (All Debt) —

How Much House Can You Afford?

The home affordability calculator helps you answer the most important question in home buying before you ever contact a real estate agent. Using standard mortgage qualifying rules, it tells you the maximum home price you can realistically finance based on your income, existing debts, available down payment, and current interest rates.

The 28/36 Qualifying Rule

Lenders use debt-to-income (DTI) ratios to evaluate mortgage applications. The two key ratios are the front-end ratio (housing costs ÷ gross income, ideally under 28%) and the back-end ratio (all monthly debts ÷ gross income, ideally under 36%). This calculator lets you choose conservative (28%), standard (36%), or lenient (43%) DTI limits to match your lender type — FHA loans allow up to 43% back-end DTI.

What Counts as Housing Costs?

Lenders include principal, interest, property taxes, and homeowner's insurance (PITI) in the housing payment. Some also add PMI and HOA fees. For simplicity, this calculator uses principal and interest to size the maximum loan. Budget an additional 1–2% of home value annually for taxes and insurance when planning your actual monthly payment.

The Down Payment Impact

A larger down payment directly increases your maximum home price by reducing the required loan size. It also eliminates private mortgage insurance (PMI) when you put down 20% or more, saving $100–$300/month on a typical loan. Down payments under 20% trigger PMI, which increases your effective monthly cost and slightly reduces affordability.

Interest Rate Sensitivity

Interest rate changes dramatically affect affordability. At a 6% rate on a $400,000 loan, the monthly P&I is about $2,398. At 7.5%, it's $2,797 — nearly $400 more per month for the same home. As rates rise, your maximum affordable price falls. Use this calculator to model how different rates affect your buying power.

Beyond the Calculator

Affordability is more than a math problem. Budget for closing costs (2–5% of home price), emergency fund maintenance, maintenance reserves (1% of home value/year), and lifestyle changes. Buying at your absolute maximum leaves no buffer. Many financial advisors suggest targeting 20–25% of gross income for housing costs to maintain financial flexibility.

Frequently Asked Questions

What is the 28/36 rule for home buying?

The 28/36 rule says housing costs should not exceed 28% of gross monthly income (front-end), and total debt payments should not exceed 36% (back-end). Conventional lenders use these as standard qualifying guidelines.

How much income do I need to buy a $400,000 home?

With a 20% down payment at 7% interest, a $400,000 home requires ~$2,120/month for P&I. Using the 28% rule, you'd need a gross monthly income of ~$7,570 ($91,000/year). More debt or less down payment increases the income needed.

What other costs should I budget for beyond the mortgage?

Budget for property taxes (0.5–2.5% of home value annually), homeowner's insurance (~$1,200–$2,000/year), PMI if down payment is under 20%, HOA fees, and maintenance (~1% of home value/year).

What credit score do I need to buy a home?

Most conventional loans require at least a 620 credit score. FHA loans allow as low as 580 with 3.5% down. Scores of 740+ qualify for the best rates, significantly increasing your buying power.

How does debt-to-income ratio affect home buying?

High existing debts (car loans, student loans) directly reduce the mortgage you qualify for. For each $100 in monthly debt, your maximum loan drops by roughly $12,000–$15,000 at typical rates. Paying off debts before buying a home meaningfully increases your buying power.