finance calculator

Home Affordability Calculator

Use this home affordability calculator to see how much house you can afford. Enter your annual income, monthly debts, and down payment to get your affordable home price, monthly payment, and DTI.

The 28/36 rule caps housing costs at 28% of gross monthly income and all debt payments at 36%, and the lower limit sets your housing budget. On $80,000 a year with $500 of other debts, 28% allows $1,867 and 36% allows $2,400 − $500 = $1,900, so the budget is $1,867. With $20,000 down at 6.5% for 30 years, 1.2% property tax and 0.5% insurance, that buys about a $257,600 home at a 35.5% DTI.

Quick actions: Save inputs, view saved runs, print, share, or export results

Saved Runs

Inputs

Annual income$

Monthly debts (not housing)$

Down payment$

Mortgage rate%

Loan termyears

Property tax rate%

Insurance rate%

Max housing ratio%

Max total debt ratio%

Results

Affordable home price

$257,592

Estimated loan amount$237,592

Gross monthly income$6,667

Max housing payment (28%)$1,867

Max total debt (36%)$2,400

Housing budget used$1,867

Principal and interest$1,502

Property tax and insurance$365

Debt-to-income ratio35.5%

Down payment$20,000

Tip

Save this page to recalculate your home budget as mortgage rates change, your down payment grows, or you pay off debts.

Summary

Key output metrics

Affordable price

$257,592

Estimated buying power from current assumptions.

Housing budget

$1,867

Set by the 28% housing limit.

Estimated loan

$237,592

Home price minus down payment.

Debt-to-income

35.5%

Housing budget plus other debts, over gross income.

Breakdown

Home price funding mix

See how the estimated purchase price splits between down payment and loan amount.

Home price funding mix
Item	Value
Down payment	$20,000
Loan amount	$237,592

Comparison

Monthly affordability inputs

Compare income, existing monthly debt, and estimated housing payment capacity.

Monthly affordability inputs
Item	Value
Income	$6,667
Debt	$500
Housing budget	$1,867

Guide

How to understand and use this calculator

How Much House Can I Afford? Quick Answer

A common guide is the 28/36 rule:

Your monthly housing costs should be no more than 28% of your gross monthly income.
Your total monthly debt, including housing, should be no more than 36% of your gross monthly income.

Simple example, for an annual income of $80,000:

Gross monthly income: $80,000 ÷ 12 = $6,667
Maximum housing payment (28%): $6,667 × 0.28 = $1,867
Maximum total debt (36%): $6,667 × 0.36 = $2,400

Affordability by income, at a 6.5% rate over 30 years with 1.2% property tax, 0.5% insurance and no other debts:

Annual Income	Max Monthly Housing Payment (28%)	Estimated Home Price (10% to 20% down)
$50,000	$1,167	$164,000 – $180,000
$80,000	$1,867	$263,000 – $288,000
$100,000	$2,333	$328,000 – $360,000
$120,000	$2,800	$394,000 – $433,000
$150,000	$3,500	$493,000 – $541,000

Key insight: your affordable home price depends on your income, debts, down payment, interest rate and credit score, and on the property tax and insurance where you buy.

How to Use the Home Affordability Calculator

To use the housing affordability calculator:

Enter your annual income before tax.
Enter your monthly debts, such as car loans, student loans and credit card minimums. Do not include rent or a current mortgage.
Enter your down payment in dollars.
Enter the mortgage rate you expect and the loan term, for example 30 or 15 years.
Enter the property tax rate and insurance rate as a percentage of the home's value each year.
Leave the housing ratio at 28% and the total debt ratio at 36%, or change them to match your lender.
Read your affordable home price, loan amount, monthly payment breakdown and DTI. The results update as you type.

Example 1:

Input	Value
Annual income	$80,000
Monthly debts	$500
Down payment	$20,000
Interest rate	6.5%
Loan term	30 years
Property tax and insurance	1.2% and 0.5%
Output	Result
Gross monthly income	$6,667
Max housing payment (28%)	$1,867
Max total debt (36%)	$2,400
Housing budget used	$1,867
Principal and interest	$1,502
Property tax and insurance	$365
Affordable home price	$257,592
Loan amount	$237,592
DTI	35.5%

The 36% limit leaves $2,400 − $500 = $1,900 for housing, which is more than $1,867, so the 28% limit sets the budget. If you ignored property tax and insurance, the same $1,867 would seem to support a $315,000 home, which is why leaving them out overstates what you can afford.

Example 2, a higher income:

Input	Value
Annual income	$120,000
Monthly debts	$800
Down payment	$40,000
Interest rate	6.5%
Loan term	30 years
Property tax and insurance	1.2% and 0.5%
Output	Result
Gross monthly income	$10,000
Max housing payment (28%)	$2,800
Max total debt (36%)	$3,600
Housing budget used	$2,800
Principal and interest	$2,241
Property tax and insurance	$559
Affordable home price	$394,557
DTI	36.0%

Here both limits give the same budget: 28% of $10,000 is $2,800, and 36% of $10,000 less $800 of debts is also $2,800. Any more debt and the 36% limit would start to lower the price.

What Is a Home Affordability Calculator?

A home affordability calculator, also called a housing affordability calculator or mortgage affordability calculator, estimates how much house you can afford from your financial situation.

What it calculates:

Affordable home price
Affordable monthly payment
Debt-to-income ratio (DTI)
Maximum mortgage amount

Who uses it:

First-time homebuyers
Repeat homebuyers
Real estate agents
Mortgage lenders
Financial planners

Why Home Affordability Matters

Working out what you can afford before you buy matters for several reasons:

Reason	Why It Matters
Avoid financial strain	Stops you buying more house than you can afford
Budget confidence	You know what you can spend
Mortgage approval	You apply for a loan your income supports
Negotiation power	You know your limit before making offers
Long-term security	You can keep up the payments for years
Emergency fund	You leave room for savings and emergencies

Real-world example: a buyer falls in love with a $500,000 home, but their income only supports a $350,000 home. Without working out affordability first, they could make a costly mistake. With a calculator, they know their real budget before they start looking.

The 28/36 Rule Explained

The 28/36 rule is a simple guideline lenders use to judge how much you can afford.

28%: the most of your gross monthly income that should go on housing costs.
36%: the most of your gross monthly income that should go on all debt payments, including housing.

What counts as housing costs:

Mortgage principal and interest
Property taxes
Homeowners insurance
HOA fees, if any

What counts as total debt:

Housing costs
Car loans
Student loans
Credit card payments
Personal loans

Example, for an annual income of $80,000:

Gross monthly income: $6,667
Maximum housing (28%): $1,867
Maximum total debt (36%): $2,400
Room for other debts: $2,400 − $1,867 = $533

If your other debts are more than $533 a month, the 36% limit, not the 28% limit, sets your housing budget. The calculator always uses the lower of the two.

What Is Debt-to-Income Ratio (DTI)?

Your debt-to-income ratio (DTI) is the share of your gross monthly income that goes on debt payments. The Consumer Financial Protection Bureau describes it as all your monthly debt payments divided by your gross monthly income.

DTI = (total monthly debt ÷ gross monthly income) × 100

Example: gross monthly income of $6,667 and total monthly debt of $2,400.

DTI = ($2,400 ÷ $6,667) × 100 = 36%

What lenders want:

DTI	What It Means
Below 36%	Strong: good approval chances
36% to 43%	Acceptable: you may still qualify
43% to 50%	Risky: you may need a high credit score or cash reserves
Above 50%	Unlikely to qualify for most loans

Key insight: a lower DTI means better approval chances and often a better interest rate.

How to Calculate How Much House You Can Afford, Step by Step

These steps follow Example 1: $80,000 income, $500 of monthly debts, $20,000 down, 6.5% for 30 years, 1.2% property tax and 0.5% insurance.

Step 1: Work out gross monthly income. $80,000 ÷ 12 = $6,667.
Step 2: Apply the 28% rule. $6,667 × 0.28 = $1,867 for housing.
Step 3: Apply the 36% rule and subtract your other debts. $6,667 × 0.36 = $2,400, and $2,400 − $500 = $1,900 for housing.
Step 4: Take the lower of the two. $1,867 is lower than $1,900, so your housing budget is $1,867 a month.
Step 5: Turn the budget into a home price. Each $1 of loan at 6.5% over 30 years costs $0.0063207 a month, and property tax and insurance cost 1.7% ÷ 12 = $0.0014167 a month for each $1 of home value. So price = ($1,867 + $20,000 × 0.0063207) ÷ (0.0063207 + 0.0014167) = $1,993 ÷ 0.0077374 ≈ $257,600.

Check: the loan is $257,592 − $20,000 = $237,592, so principal and interest are $1,502 and tax and insurance are $365, which add up to $1,867.

Answer: you can afford a home of about $257,600.

What House Can I Afford? By Income Level

Here is a quick reference for what house you can afford based on income. It assumes a 6.5% rate over 30 years, 1.2% property tax, 0.5% insurance, no other debts, and a housing payment of 28% of gross income.

Annual Income	Gross Monthly	Max Housing (28%)	Home Price, 10% Down	Home Price, 20% Down
$40,000	$3,333	$933	$131,000	$144,000
$50,000	$4,167	$1,167	$164,000	$180,000
$60,000	$5,000	$1,400	$197,000	$216,000
$70,000	$5,833	$1,633	$230,000	$252,000
$80,000	$6,667	$1,867	$263,000	$288,000
$100,000	$8,333	$2,333	$328,000	$360,000
$120,000	$10,000	$2,800	$394,000	$433,000
$150,000	$12,500	$3,500	$493,000	$541,000
$200,000	$16,667	$4,667	$657,000	$721,000

Older rules of thumb put the price at 4 to 5 times income. At a 6.5% rate, once property tax and insurance are included, the 28% rule gives closer to 3.3 to 3.6 times income. A lower rate, lower taxes or a bigger down payment raises the figure.

Note: these are estimates. Your real budget depends on your debts, down payment, credit score and the rate you are offered.

How Much Mortgage Can I Be Approved For?

How much mortgage you can be approved for depends on several factors:

Factor	Effect on Approval
Income	Higher income = larger loan
Debts	Lower debts = larger loan
Credit score	Higher score = better rate, which supports a larger loan
Down payment	Larger down payment = higher home price for the same payment
Employment history	Stable history = easier approval
Assets	More savings and reserves = stronger application

Credit score and approval chances:

Credit Score	What It Usually Means
760 and above	Excellent: best rates and terms
700 to 759	Good: competitive rates
640 to 699	Fair: approval is likely, at a higher rate
580 to 639	Limited: FHA loans are the main option (3.5% down from 580)
Below 580	Very difficult: FHA needs 10% down for scores from 500 to 579

Most lenders look for a DTI of 43% or less, although some loan programs allow more with strong compensating factors.

Factors That Affect Your Home Affordability

Factor	How It Affects Affordability
Income	Higher income = more affordable
Debts	More debts = less affordable
Down payment	Larger down payment = more affordable
Credit score	Higher score = better rate = more affordable
Interest rate	Lower rate = more affordable
Loan term	Longer term = lower payments
Property taxes	Higher taxes = less affordable
Insurance	Higher premiums = less affordable
HOA fees	Higher fees = less affordable

HOA fees and mortgage insurance are not separate inputs here. To allow for them, add them to your monthly debts, or use the HOA fee impact calculator to see what they cost you in purchase price.

How to Use This as a Home Mortgage Calculator

A home mortgage calculator estimates your monthly mortgage payment. The standard formula is:

M = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1]

M = monthly payment
P = principal (the loan amount)
r = monthly interest rate (annual rate ÷ 12)
n = number of payments (years × 12)

Example: a $300,000 loan at 6.5% for 30 years.

r = 0.065 ÷ 12 = 0.0054167
n = 30 × 12 = 360
M = $300,000 × [0.0054167 × (1.0054167)^360] ÷ [(1.0054167)^360 − 1] = $1,896.20

If that loan buys a $330,000 home with $30,000 down, property tax at 1.2% and insurance at 0.5% add $330,000 × 1.7% ÷ 12 = $467.50, for a total of about $2,364 a month.

This calculator runs the same formula in reverse: it starts from the payment you can afford and works back to the loan and home price. For the payment on a price you already have in mind, use the mortgage calculator.

How to Use This as a Mortgage Pre-Approval Calculator

A mortgage pre-approval calculator estimates how much a lender might approve you for. What lenders look at:

Factor	What They Look For
Income	Stable income you can document
Debts	DTI below about 43%
Credit score	Usually 620 or more for a conventional loan
Down payment	3% to 20% depending on the loan type
Employment	About two years of steady work history
Assets	Savings and investments

Pre-qualification and pre-approval compared:

Feature	Pre-Qualification	Pre-Approval
Depth	Basic estimate	Detailed check
Documents	Usually none	Pay stubs, tax returns, bank statements
Credit check	Soft pull	Hard pull
Value	Rough estimate	Stronger offer to a seller

First-Time Homebuyer Tips

Tip	Why It Helps
Check first-time buyer programs	Grants and low down payment options
Improve your credit score	Lower rates and easier approval
Save a larger down payment	Lower payments, and 20% down avoids PMI on a conventional loan
Get pre-approved	You know your budget and your offers are stronger
Consider an FHA loan	3.5% down with a credit score of 580 or more
Consider a VA loan	No down payment for eligible veterans and service members
Budget for closing costs	Usually 2% to 5% of the home price
Remember moving costs	Movers, deposits and first repairs add up

For government-backed loans, the FHA/VA loan affordability calculator applies each programme's own limits.

Practice Problems

Problem 1: a buyer earns $60,000 a year and has $400 of monthly debts. What is their maximum housing payment under the 28% rule?

Solution: gross monthly income = $60,000 ÷ 12 = $5,000. Maximum housing = $5,000 × 0.28 = $1,400.

Problem 2: using Problem 1, what is their maximum total debt under the 36% rule?

Solution: maximum total debt = $5,000 × 0.36 = $1,800. After their $400 of debts, that also leaves exactly $1,400 for housing.

Problem 3: a buyer has $7,500 of monthly income and $1,500 of monthly debts. What is their DTI?

Solution: DTI = ($1,500 ÷ $7,500) × 100 = 20%.

Problem 4: a buyer earning $100,000 wants a home priced at $450,000. They have a $50,000 down payment and expect a 6.5% rate over 30 years. Can they afford it?

Solution: gross monthly income = $8,333, so maximum housing (28%) = $2,333. The loan is $450,000 − $50,000 = $400,000, and its principal and interest alone are $2,528. $2,528 is more than $2,333, so it is not affordable under the 28% rule, even before property tax and insurance.

Problem 5: a buyer has $80,000 of annual income, $300 of monthly debts and will put 10% down. At 6.5% over 30 years, with 1.2% property tax and 0.5% insurance, what home price can they afford?

Solution: gross monthly income = $6,667. Maximum housing (28%) = $1,867. The 36% limit allows $2,400 − $300 = $2,100, so the 28% limit sets the budget at $1,867. With 10% down, each $1 of price costs 0.9 × $0.0063207 + $0.0014167 = $0.0071053 a month, so price = $1,867 ÷ 0.0071053 ≈ $262,700.

Problem	Answer
1	$1,400
2	$1,800
3	20%
4	No: the payment is above the 28% limit
5	About $262,700

Common Home Affordability Mistakes

Mistake	What Goes Wrong	Fix
Forgetting property tax and insurance	Counting only principal and interest	Include tax, insurance and HOA fees
Ignoring other debts	Leaving out car loans, student loans and cards	Include every monthly debt payment
Using take-home pay for DTI	Mixing net pay with lender ratios	Lenders use gross income for DTI
Not getting pre-approved	House hunting without a clear budget	Get pre-approved before you shop
Forgetting closing costs	Saving only for the down payment	Budget 2% to 5% of the price for closing costs
Assuming low rates will last	A budget that only works at today's rate	Test your budget at a higher rate
Overlooking maintenance	No money set aside for repairs	Budget 1% to 2% of the home's value each year
Ignoring future changes	Buying on today's income only	Think about job changes, children and retirement

Lender ratios use gross income, but your own budget should also work on your take-home pay. Being approved for a loan does not mean the payment will be comfortable.

What This Calculator Can and Cannot Do

This calculator can help with:

Estimating an affordable home price
Working out an affordable monthly payment
Showing your DTI at that payment
Applying the 28/36 rule, or your lender's own ratios
Estimating how large a mortgage your income supports
Comparing rates, terms and down payments

This calculator cannot:

Guarantee mortgage approval
Replace a lender's pre-approval
Include PMI or HOA fees unless you add them to your monthly debts
Account for every lender's own rules
Provide legal or financial advice
Predict future interest rates

Related Calculators

Calculator	When to Use It
Mortgage calculator	For the monthly payment on a home price
Property tax calculator	For the property tax rate to enter here
Down payment calculator	For planning and saving your down payment
Debt-to-income ratio calculator	For your current DTI before a new mortgage
Real estate agent commission calculator	For the costs of buying and selling
Rent affordability calculator	For the same budget if you rent instead
Rent vs. buy calculator	For comparing the cost of owning with renting
Home insurance replacement cost calculator	For the insurance cost to enter here

Summary: The Key Home Affordability Rules

A home affordability calculator helps any homebuyer set a realistic budget. Knowing how much house you can afford, and how the 28/36 rule works, keeps you from taking on a payment you cannot keep up.

28/36 rule: housing at or below 28% of gross income, and all debts at or below 36%
DTI: (total monthly debt ÷ gross monthly income) × 100
Affordable home price: set by your income, debts, down payment, interest rate, property tax and insurance

Quick reference, at 6.5% for 30 years with 1.2% property tax, 0.5% insurance and no other debts:

Annual Income	Max Monthly Housing Payment (28%)	Estimated Home Price (10% to 20% down)
$50,000	$1,167	$164,000 – $180,000
$80,000	$1,867	$263,000 – $288,000
$100,000	$2,333	$328,000 – $360,000
$120,000	$2,800	$394,000 – $433,000
$150,000	$3,500	$493,000 – $541,000

Enter your own figures in the calculator above to see your result. It is free and needs no sign-up.

Related concepts

28/36 Rule

A guideline that keeps housing costs at or below 28% of gross income and all debts at or below 36%.

Debt-to-Income (DTI)

The percentage of gross monthly income that goes on debt payments, used by lenders to judge risk.

PITI

Principal, interest, taxes and insurance: the full monthly housing payment the 28% limit applies to.

Pre-Approval

A lender's conditional offer after checking your credit, income and assets.

Frequently Asked Questions

What is a home affordability calculator?+

A home affordability calculator estimates how much house you can afford from your income, monthly debts, down payment, interest rate, and property tax and insurance costs.

What house can I afford?+

Use the 28/36 rule: housing costs at or below 28% of your gross monthly income, and all debt payments at or below 36%. On $80,000 a year with $500 of other debts, that is a $1,867 housing budget, which buys about a $257,600 home with $20,000 down at 6.5% for 30 years, including 1.2% property tax and 0.5% insurance.

How much mortgage can I be approved for?+

It depends on your income, debts, credit score and down payment. Lenders mainly use your debt-to-income ratio: most look for a DTI of 43% or less, and some programs allow more with strong credit or reserves.

What is the 28/36 rule?+

Housing costs should not be more than 28% of your gross monthly income, and total debt payments, including housing, should not be more than 36%. The lower of the two limits sets your housing budget.

What is DTI?+

Debt-to-income ratio is the share of your gross monthly income that goes on debt payments: DTI = total monthly debt ÷ gross monthly income × 100.

What is a good DTI?+

Below 36% is strong. 36% to 43% is usually acceptable. Above 43% can make it hard to qualify, and above 50% most loans are out of reach.

How much house can I afford on an $80,000 salary?+

About $263,000 with 10% down or $288,000 with 20% down, at 6.5% for 30 years with 1.2% property tax, 0.5% insurance and no other debts. Other debts or a higher rate lower the figure.

How much house can I afford on a $100,000 salary?+

About $328,000 with 10% down or $360,000 with 20% down, on the same assumptions: 6.5% for 30 years, 1.2% property tax, 0.5% insurance and no other debts.

What is a mortgage pre-approval calculator?+

It estimates how much a lender might approve you for from your income, debts and down payment. It is not a pre-approval: that needs a lender to check your credit and documents.

How do I improve my home affordability?+

Pay down debts, save a larger down payment, improve your credit score to get a lower rate, and look at first-time buyer programs.

What is PMI?+

Private mortgage insurance protects the lender on a conventional loan when you put down less than 20%. It adds to your monthly payment until you reach enough equity to remove it. FHA loans have their own mortgage insurance premium instead.

Formula

The 28/36 rule

Housing budget = lower of (gross monthly income × 28%) and (gross monthly income × 36% − other monthly debts)

The housing budget covers principal, interest, property tax and insurance. The calculator finds the home price whose full monthly payment equals that budget.

Step by step

How the calculation works

1Enter income, monthly debts, down payment, loan terms, and property tax and insurance rates.
2The calculator takes the lower of the 28% housing limit and the 36% total debt limit as your housing budget.
3It finds the home price whose principal, interest, tax and insurance add up to that budget.

Example

Home affordability example

With $80,000 income, $500 of monthly debts and $20,000 down at 6.5% for 30 years, the housing budget is $1,867 a month. With 1.2% property tax and 0.5% insurance, that supports a home price of about $257,600 and a DTI of 35.5%.

Related guides

Learn more about this calculation

Guide

Home Affordability: Budget, Formula, and Calculator

Estimate a home-price range from income, debt, down payment, rate, taxes, and insurance, then test costs the DTC model does not include.

Guide

How to Compare Mortgage Offers: Loan Estimates, APR, Points

Read a Loan Estimate section by section, compare two offers on rate, points, APR and five-year cost, and know which closing costs a lender is allowed to raise.

Guide

Down Payment Savings Guide: Cash Target, Closing Costs, and Timeline Planning

Build a realistic down payment plan by including closing costs, savings pace, PMI tradeoffs, and the cash cushion you still need after closing.

finance calculator

Home Affordability Calculator

Use this home affordability calculator to see how much house you can afford. Enter your annual income, monthly debts, and down payment to get your affordable home price, monthly payment, and DTI.

Quick actions: Save inputs, view saved runs, print, share, or export results

Saved Runs

Inputs

Annual income$

Monthly debts (not housing)$

Down payment$

Mortgage rate%

Loan termyears

Property tax rate%

Insurance rate%

Max housing ratio%

Max total debt ratio%

Results

Affordable home price

$257,592

Estimated loan amount$237,592

Gross monthly income$6,667

Max housing payment (28%)$1,867

Max total debt (36%)$2,400

Housing budget used$1,867

Principal and interest$1,502

Property tax and insurance$365

Debt-to-income ratio35.5%

Down payment$20,000

Tip

Save this page to recalculate your home budget as mortgage rates change, your down payment grows, or you pay off debts.

Summary

Key output metrics

Affordable price

$257,592

Estimated buying power from current assumptions.

Housing budget

$1,867

Set by the 28% housing limit.

Estimated loan

$237,592

Home price minus down payment.

Debt-to-income

35.5%

Housing budget plus other debts, over gross income.

Breakdown

Home price funding mix

See how the estimated purchase price splits between down payment and loan amount.

Home price funding mix
Item	Value
Down payment	$20,000
Loan amount	$237,592

Comparison

Monthly affordability inputs

Compare income, existing monthly debt, and estimated housing payment capacity.

Monthly affordability inputs
Item	Value
Income	$6,667
Debt	$500
Housing budget	$1,867

Guide

How to understand and use this calculator

How Much House Can I Afford? Quick Answer

A common guide is the 28/36 rule:

Your monthly housing costs should be no more than 28% of your gross monthly income.
Your total monthly debt, including housing, should be no more than 36% of your gross monthly income.

Simple example, for an annual income of $80,000:

Gross monthly income: $80,000 ÷ 12 = $6,667
Maximum housing payment (28%): $6,667 × 0.28 = $1,867
Maximum total debt (36%): $6,667 × 0.36 = $2,400

Affordability by income, at a 6.5% rate over 30 years with 1.2% property tax, 0.5% insurance and no other debts:

Annual Income	Max Monthly Housing Payment (28%)	Estimated Home Price (10% to 20% down)
$50,000	$1,167	$164,000 – $180,000
$80,000	$1,867	$263,000 – $288,000
$100,000	$2,333	$328,000 – $360,000
$120,000	$2,800	$394,000 – $433,000
$150,000	$3,500	$493,000 – $541,000

Key insight: your affordable home price depends on your income, debts, down payment, interest rate and credit score, and on the property tax and insurance where you buy.

How to Use the Home Affordability Calculator

To use the housing affordability calculator:

Enter your annual income before tax.
Enter your monthly debts, such as car loans, student loans and credit card minimums. Do not include rent or a current mortgage.
Enter your down payment in dollars.
Enter the mortgage rate you expect and the loan term, for example 30 or 15 years.
Enter the property tax rate and insurance rate as a percentage of the home's value each year.
Leave the housing ratio at 28% and the total debt ratio at 36%, or change them to match your lender.
Read your affordable home price, loan amount, monthly payment breakdown and DTI. The results update as you type.

Example 1:

Input	Value
Annual income	$80,000
Monthly debts	$500
Down payment	$20,000
Interest rate	6.5%
Loan term	30 years
Property tax and insurance	1.2% and 0.5%
Output	Result
Gross monthly income	$6,667
Max housing payment (28%)	$1,867
Max total debt (36%)	$2,400
Housing budget used	$1,867
Principal and interest	$1,502
Property tax and insurance	$365
Affordable home price	$257,592
Loan amount	$237,592
DTI	35.5%

Example 2, a higher income:

Input	Value
Annual income	$120,000
Monthly debts	$800
Down payment	$40,000
Interest rate	6.5%
Loan term	30 years
Property tax and insurance	1.2% and 0.5%
Output	Result
Gross monthly income	$10,000
Max housing payment (28%)	$2,800
Max total debt (36%)	$3,600
Housing budget used	$2,800
Principal and interest	$2,241
Property tax and insurance	$559
Affordable home price	$394,557
DTI	36.0%

Here both limits give the same budget: 28% of $10,000 is $2,800, and 36% of $10,000 less $800 of debts is also $2,800. Any more debt and the 36% limit would start to lower the price.

What Is a Home Affordability Calculator?

A home affordability calculator, also called a housing affordability calculator or mortgage affordability calculator, estimates how much house you can afford from your financial situation.

What it calculates:

Affordable home price
Affordable monthly payment
Debt-to-income ratio (DTI)
Maximum mortgage amount

Who uses it:

First-time homebuyers
Repeat homebuyers
Real estate agents
Mortgage lenders
Financial planners

Why Home Affordability Matters

Working out what you can afford before you buy matters for several reasons:

Reason	Why It Matters
Avoid financial strain	Stops you buying more house than you can afford
Budget confidence	You know what you can spend
Mortgage approval	You apply for a loan your income supports
Negotiation power	You know your limit before making offers
Long-term security	You can keep up the payments for years
Emergency fund	You leave room for savings and emergencies

The 28/36 Rule Explained

The 28/36 rule is a simple guideline lenders use to judge how much you can afford.

28%: the most of your gross monthly income that should go on housing costs.
36%: the most of your gross monthly income that should go on all debt payments, including housing.

What counts as housing costs:

Mortgage principal and interest
Property taxes
Homeowners insurance
HOA fees, if any

What counts as total debt:

Housing costs
Car loans
Student loans
Credit card payments
Personal loans

Example, for an annual income of $80,000:

Gross monthly income: $6,667
Maximum housing (28%): $1,867
Maximum total debt (36%): $2,400
Room for other debts: $2,400 − $1,867 = $533

If your other debts are more than $533 a month, the 36% limit, not the 28% limit, sets your housing budget. The calculator always uses the lower of the two.

What Is Debt-to-Income Ratio (DTI)?

DTI = (total monthly debt ÷ gross monthly income) × 100

Example: gross monthly income of $6,667 and total monthly debt of $2,400.

DTI = ($2,400 ÷ $6,667) × 100 = 36%

What lenders want:

DTI	What It Means
Below 36%	Strong: good approval chances
36% to 43%	Acceptable: you may still qualify
43% to 50%	Risky: you may need a high credit score or cash reserves
Above 50%	Unlikely to qualify for most loans

Key insight: a lower DTI means better approval chances and often a better interest rate.

How to Calculate How Much House You Can Afford, Step by Step

These steps follow Example 1: $80,000 income, $500 of monthly debts, $20,000 down, 6.5% for 30 years, 1.2% property tax and 0.5% insurance.

Step 1: Work out gross monthly income. $80,000 ÷ 12 = $6,667.
Step 2: Apply the 28% rule. $6,667 × 0.28 = $1,867 for housing.
Step 3: Apply the 36% rule and subtract your other debts. $6,667 × 0.36 = $2,400, and $2,400 − $500 = $1,900 for housing.
Step 4: Take the lower of the two. $1,867 is lower than $1,900, so your housing budget is $1,867 a month.
Step 5: Turn the budget into a home price. Each $1 of loan at 6.5% over 30 years costs $0.0063207 a month, and property tax and insurance cost 1.7% ÷ 12 = $0.0014167 a month for each $1 of home value. So price = ($1,867 + $20,000 × 0.0063207) ÷ (0.0063207 + 0.0014167) = $1,993 ÷ 0.0077374 ≈ $257,600.

Check: the loan is $257,592 − $20,000 = $237,592, so principal and interest are $1,502 and tax and insurance are $365, which add up to $1,867.

Answer: you can afford a home of about $257,600.

What House Can I Afford? By Income Level

Annual Income	Gross Monthly	Max Housing (28%)	Home Price, 10% Down	Home Price, 20% Down
$40,000	$3,333	$933	$131,000	$144,000
$50,000	$4,167	$1,167	$164,000	$180,000
$60,000	$5,000	$1,400	$197,000	$216,000
$70,000	$5,833	$1,633	$230,000	$252,000
$80,000	$6,667	$1,867	$263,000	$288,000
$100,000	$8,333	$2,333	$328,000	$360,000
$120,000	$10,000	$2,800	$394,000	$433,000
$150,000	$12,500	$3,500	$493,000	$541,000
$200,000	$16,667	$4,667	$657,000	$721,000

Note: these are estimates. Your real budget depends on your debts, down payment, credit score and the rate you are offered.

How Much Mortgage Can I Be Approved For?

How much mortgage you can be approved for depends on several factors:

Factor	Effect on Approval
Income	Higher income = larger loan
Debts	Lower debts = larger loan
Credit score	Higher score = better rate, which supports a larger loan
Down payment	Larger down payment = higher home price for the same payment
Employment history	Stable history = easier approval
Assets	More savings and reserves = stronger application

Credit score and approval chances:

Credit Score	What It Usually Means
760 and above	Excellent: best rates and terms
700 to 759	Good: competitive rates
640 to 699	Fair: approval is likely, at a higher rate
580 to 639	Limited: FHA loans are the main option (3.5% down from 580)
Below 580	Very difficult: FHA needs 10% down for scores from 500 to 579

Most lenders look for a DTI of 43% or less, although some loan programs allow more with strong compensating factors.

Factors That Affect Your Home Affordability

Factor	How It Affects Affordability
Income	Higher income = more affordable
Debts	More debts = less affordable
Down payment	Larger down payment = more affordable
Credit score	Higher score = better rate = more affordable
Interest rate	Lower rate = more affordable
Loan term	Longer term = lower payments
Property taxes	Higher taxes = less affordable
Insurance	Higher premiums = less affordable
HOA fees	Higher fees = less affordable

HOA fees and mortgage insurance are not separate inputs here. To allow for them, add them to your monthly debts, or use the HOA fee impact calculator to see what they cost you in purchase price.

How to Use This as a Home Mortgage Calculator

A home mortgage calculator estimates your monthly mortgage payment. The standard formula is:

M = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1]

M = monthly payment
P = principal (the loan amount)
r = monthly interest rate (annual rate ÷ 12)
n = number of payments (years × 12)

Example: a $300,000 loan at 6.5% for 30 years.

r = 0.065 ÷ 12 = 0.0054167
n = 30 × 12 = 360
M = $300,000 × [0.0054167 × (1.0054167)^360] ÷ [(1.0054167)^360 − 1] = $1,896.20

If that loan buys a $330,000 home with $30,000 down, property tax at 1.2% and insurance at 0.5% add $330,000 × 1.7% ÷ 12 = $467.50, for a total of about $2,364 a month.

How to Use This as a Mortgage Pre-Approval Calculator

A mortgage pre-approval calculator estimates how much a lender might approve you for. What lenders look at:

Factor	What They Look For
Income	Stable income you can document
Debts	DTI below about 43%
Credit score	Usually 620 or more for a conventional loan
Down payment	3% to 20% depending on the loan type
Employment	About two years of steady work history
Assets	Savings and investments

Pre-qualification and pre-approval compared:

Feature	Pre-Qualification	Pre-Approval
Depth	Basic estimate	Detailed check
Documents	Usually none	Pay stubs, tax returns, bank statements
Credit check	Soft pull	Hard pull
Value	Rough estimate	Stronger offer to a seller

First-Time Homebuyer Tips

Tip	Why It Helps
Check first-time buyer programs	Grants and low down payment options
Improve your credit score	Lower rates and easier approval
Save a larger down payment	Lower payments, and 20% down avoids PMI on a conventional loan
Get pre-approved	You know your budget and your offers are stronger
Consider an FHA loan	3.5% down with a credit score of 580 or more
Consider a VA loan	No down payment for eligible veterans and service members
Budget for closing costs	Usually 2% to 5% of the home price
Remember moving costs	Movers, deposits and first repairs add up

For government-backed loans, the FHA/VA loan affordability calculator applies each programme's own limits.

Practice Problems

Problem 1: a buyer earns $60,000 a year and has $400 of monthly debts. What is their maximum housing payment under the 28% rule?

Solution: gross monthly income = $60,000 ÷ 12 = $5,000. Maximum housing = $5,000 × 0.28 = $1,400.

Problem 2: using Problem 1, what is their maximum total debt under the 36% rule?

Solution: maximum total debt = $5,000 × 0.36 = $1,800. After their $400 of debts, that also leaves exactly $1,400 for housing.

Problem 3: a buyer has $7,500 of monthly income and $1,500 of monthly debts. What is their DTI?

Solution: DTI = ($1,500 ÷ $7,500) × 100 = 20%.

Problem 4: a buyer earning $100,000 wants a home priced at $450,000. They have a $50,000 down payment and expect a 6.5% rate over 30 years. Can they afford it?

Problem 5: a buyer has $80,000 of annual income, $300 of monthly debts and will put 10% down. At 6.5% over 30 years, with 1.2% property tax and 0.5% insurance, what home price can they afford?

Problem	Answer
1	$1,400
2	$1,800
3	20%
4	No: the payment is above the 28% limit
5	About $262,700

Common Home Affordability Mistakes

Mistake	What Goes Wrong	Fix
Forgetting property tax and insurance	Counting only principal and interest	Include tax, insurance and HOA fees
Ignoring other debts	Leaving out car loans, student loans and cards	Include every monthly debt payment
Using take-home pay for DTI	Mixing net pay with lender ratios	Lenders use gross income for DTI
Not getting pre-approved	House hunting without a clear budget	Get pre-approved before you shop
Forgetting closing costs	Saving only for the down payment	Budget 2% to 5% of the price for closing costs
Assuming low rates will last	A budget that only works at today's rate	Test your budget at a higher rate
Overlooking maintenance	No money set aside for repairs	Budget 1% to 2% of the home's value each year
Ignoring future changes	Buying on today's income only	Think about job changes, children and retirement

Lender ratios use gross income, but your own budget should also work on your take-home pay. Being approved for a loan does not mean the payment will be comfortable.

What This Calculator Can and Cannot Do

This calculator can help with:

Estimating an affordable home price
Working out an affordable monthly payment
Showing your DTI at that payment
Applying the 28/36 rule, or your lender's own ratios
Estimating how large a mortgage your income supports
Comparing rates, terms and down payments

This calculator cannot:

Guarantee mortgage approval
Replace a lender's pre-approval
Include PMI or HOA fees unless you add them to your monthly debts
Account for every lender's own rules
Provide legal or financial advice
Predict future interest rates

Related Calculators

Calculator	When to Use It
Mortgage calculator	For the monthly payment on a home price
Property tax calculator	For the property tax rate to enter here
Down payment calculator	For planning and saving your down payment
Debt-to-income ratio calculator	For your current DTI before a new mortgage
Real estate agent commission calculator	For the costs of buying and selling
Rent affordability calculator	For the same budget if you rent instead
Rent vs. buy calculator	For comparing the cost of owning with renting
Home insurance replacement cost calculator	For the insurance cost to enter here

Summary: The Key Home Affordability Rules

A home affordability calculator helps any homebuyer set a realistic budget. Knowing how much house you can afford, and how the 28/36 rule works, keeps you from taking on a payment you cannot keep up.

28/36 rule: housing at or below 28% of gross income, and all debts at or below 36%
DTI: (total monthly debt ÷ gross monthly income) × 100
Affordable home price: set by your income, debts, down payment, interest rate, property tax and insurance

Quick reference, at 6.5% for 30 years with 1.2% property tax, 0.5% insurance and no other debts:

Annual Income	Max Monthly Housing Payment (28%)	Estimated Home Price (10% to 20% down)
$50,000	$1,167	$164,000 – $180,000
$80,000	$1,867	$263,000 – $288,000
$100,000	$2,333	$328,000 – $360,000
$120,000	$2,800	$394,000 – $433,000
$150,000	$3,500	$493,000 – $541,000

Enter your own figures in the calculator above to see your result. It is free and needs no sign-up.

Related concepts

28/36 Rule

A guideline that keeps housing costs at or below 28% of gross income and all debts at or below 36%.

Debt-to-Income (DTI)

The percentage of gross monthly income that goes on debt payments, used by lenders to judge risk.

PITI

Principal, interest, taxes and insurance: the full monthly housing payment the 28% limit applies to.

Pre-Approval

A lender's conditional offer after checking your credit, income and assets.

Frequently Asked Questions

What is a home affordability calculator?+

A home affordability calculator estimates how much house you can afford from your income, monthly debts, down payment, interest rate, and property tax and insurance costs.

What house can I afford?+

How much mortgage can I be approved for?+

What is the 28/36 rule?+

Housing costs should not be more than 28% of your gross monthly income, and total debt payments, including housing, should not be more than 36%. The lower of the two limits sets your housing budget.

What is DTI?+

Debt-to-income ratio is the share of your gross monthly income that goes on debt payments: DTI = total monthly debt ÷ gross monthly income × 100.

What is a good DTI?+

Below 36% is strong. 36% to 43% is usually acceptable. Above 43% can make it hard to qualify, and above 50% most loans are out of reach.

How much house can I afford on an $80,000 salary?+

About $263,000 with 10% down or $288,000 with 20% down, at 6.5% for 30 years with 1.2% property tax, 0.5% insurance and no other debts. Other debts or a higher rate lower the figure.

How much house can I afford on a $100,000 salary?+

About $328,000 with 10% down or $360,000 with 20% down, on the same assumptions: 6.5% for 30 years, 1.2% property tax, 0.5% insurance and no other debts.

What is a mortgage pre-approval calculator?+

It estimates how much a lender might approve you for from your income, debts and down payment. It is not a pre-approval: that needs a lender to check your credit and documents.

How do I improve my home affordability?+

Pay down debts, save a larger down payment, improve your credit score to get a lower rate, and look at first-time buyer programs.

What is PMI?+

Formula

The 28/36 rule

Housing budget = lower of (gross monthly income × 28%) and (gross monthly income × 36% − other monthly debts)

The housing budget covers principal, interest, property tax and insurance. The calculator finds the home price whose full monthly payment equals that budget.

Step by step

How the calculation works

1Enter income, monthly debts, down payment, loan terms, and property tax and insurance rates.
2The calculator takes the lower of the 28% housing limit and the 36% total debt limit as your housing budget.
3It finds the home price whose principal, interest, tax and insurance add up to that budget.

Example

Home affordability example

Related guides

Learn more about this calculation

Guide

Home Affordability Calculator

Inputs

Results

Key output metrics

Home price funding mix

Monthly affordability inputs

How to understand and use this calculator

How Much House Can I Afford? Quick Answer

How to Use the Home Affordability Calculator

What Is a Home Affordability Calculator?

Why Home Affordability Matters

The 28/36 Rule Explained

What Is Debt-to-Income Ratio (DTI)?

How to Calculate How Much House You Can Afford, Step by Step

What House Can I Afford? By Income Level

How Much Mortgage Can I Be Approved For?

Factors That Affect Your Home Affordability

How to Use This as a Home Mortgage Calculator

How to Use This as a Mortgage Pre-Approval Calculator

First-Time Homebuyer Tips

Practice Problems

Common Home Affordability Mistakes

What This Calculator Can and Cannot Do

Related Calculators

Summary: The Key Home Affordability Rules

Related concepts

Frequently Asked Questions

The 28/36 rule

How the calculation works

Home affordability example

Learn more about this calculation

Home Affordability: Budget, Formula, and Calculator

How to Compare Mortgage Offers: Loan Estimates, APR, Points

Down Payment Savings Guide: Cash Target, Closing Costs, and Timeline Planning

Key facts

Sources & methodology

Home Affordability Calculator

Inputs

Results

Key output metrics

Home price funding mix

Monthly affordability inputs

How to understand and use this calculator

How Much House Can I Afford? Quick Answer

How to Use the Home Affordability Calculator

What Is a Home Affordability Calculator?

Why Home Affordability Matters

The 28/36 Rule Explained

What Is Debt-to-Income Ratio (DTI)?

How to Calculate How Much House You Can Afford, Step by Step

What House Can I Afford? By Income Level

How Much Mortgage Can I Be Approved For?

Factors That Affect Your Home Affordability

How to Use This as a Home Mortgage Calculator

How to Use This as a Mortgage Pre-Approval Calculator

First-Time Homebuyer Tips

Practice Problems

Common Home Affordability Mistakes

What This Calculator Can and Cannot Do

Related Calculators

Summary: The Key Home Affordability Rules

Related concepts

Frequently Asked Questions

The 28/36 rule

How the calculation works

Home affordability example

Learn more about this calculation

Home Affordability: Budget, Formula, and Calculator

How to Compare Mortgage Offers: Loan Estimates, APR, Points

Down Payment Savings Guide: Cash Target, Closing Costs, and Timeline Planning

Key facts

Sources & methodology