Home Affordability Calculator
The Home Affordability Calculator estimates the maximum home price you can afford given your income, down payment, debts and a debt-to-income limit. It factors in property taxes and insurance to keep the estimate realistic.
What this means
Lenders limit your total housing payment to a percentage of your gross income (your chosen debt-to-income limit, commonly 36–43%). This calculator works backward from that limit to find the loan and home price you can support.
How we calculate it
Formula
Max home price = loan amount + down payment, where the monthly loan payment fits within your debt-to-income budget after other debts, taxes and insurance.Worked example
$100,000 income, $50,000 down, 6% rate, 30-year term, $500 monthly debts:
- 1Max monthly housing = ($100,000/12 × 36%) − $500 = $2,500
- 2Loan supportable at 6%/30yr ≈ $417,000
- 3Max home price ≈ $417,000 + $50,000 ≈ $467,000
Important assumptions
- You choose the debt-to-income limit; lenders use their own thresholds.
- Property taxes and insurance are held constant over the term.
- The mortgage rate is fixed and your income and debts stay as entered.
Frequently asked questions
What is a good debt-to-income ratio?
Most lenders prefer a back-end DTI of 36% or less and rarely approve above 43%. Keeping housing costs under 28% of income is a common guideline.
Should I use 20% down?
20% avoids PMI and lowers payments, but many buyers use less. Weigh the PMI cost against the opportunity of keeping cash liquid.
Can I afford more with a longer term?
Yes — a 30-year term lowers the monthly payment and raises the affordable price. But you pay more total interest over time.