Home Affordability Calculator
Find the home price you can afford from income, debts, down payment, and rate.
What it does
Home affordability starts with income, not with the listing price. Lenders use the 28 percent front end ratio for housing and the 36 percent back end ratio for all debts including housing, so the lower of the two budgets wins.
The tool above takes yearly income, monthly debts, down payment percent, mortgage rate, term, and monthly tax and insurance. It returns the max monthly housing payment, the home price that payment supports, and the cash down payment due at closing.
Tax and insurance come out of the housing budget before principal and interest, so a high tax or insurance area buys less house than a low one at the same payment.
This is a planning estimate. Lenders also check credit, employment history, assets, and property type, and actual rates and fees change the number.
How to use
- Enter your gross yearly income before tax.
- Enter monthly debt payments such as car loans, student loans, and credit card minimums.
- Enter the down payment percent you plan to put down.
- Enter the mortgage rate and term in years.
- Enter monthly property tax and homeowners insurance, then read max housing, max price, and down needed.
Formula
- income
- Gross yearly income in dollars.
- debts
- Monthly debt payments in dollars.
- down_pct
- Down payment as a percent of price.
- rate
- Mortgage annual rate in percent.
- yrs
- Loan term in years.
- tax_ins
- Monthly property tax and insurance in dollars.
The 28/36 rule is a lending guideline, not a guarantee. Loan factor converts principal and interest payment into loan size using the rate and term.
Worked example
Example: $72,000 income, $400 debts, 20% down, 6.5%, 30 years, $300 tax/ins
Yearly income 72,000, monthly debts 400, down payment 20 percent, rate 6.5 percent, term 30 years, tax and insurance 300 per month.
- Monthly income: 72,000 / 12 = $6,000.00.
- Housing cap: 6,000 x 0.28 = $1,680.00; debt cap: 6,000 x 0.36 minus 400 = $1,760.00; lower is $1,680.00.
- Principal and interest: 1,680 minus 300 = $1,380.00.
- Loan at 6.5 percent for 30 years: about $218,331 principal.
- Home price: 218,331 divided by 0.80 is about $272,914; down needed about $54,583.
- Tool shows max housing $1,680.00/mo, max price $272,913.66, down needed $54,582.73.
Reference table
| Yearly income | Max monthly housing | Max home price |
|---|---|---|
| $50,000 | $1,166.67 | about $190,000 |
| $72,000 | $1,680.00 | about $272,914 |
| $100,000 | $2,333.33 | about $380,000 |
| $120,000 | $2,800.00 | about $456,000 |
Limits
- The 28/36 rule is a guideline, not a guarantee of approval.
- Credit score, assets, employment, and property type all affect real lending.
- Rates, taxes, insurance, and HOA fees change the price that fits.
- Closing costs, moving, and repairs sit outside this math.
Common mistakes
- Using take home pay instead of gross income.
- Forgetting car, student loan, and credit card payments in debts.
- Ignoring property tax and insurance, which shrink the price.
- Treating the max price as a target rather than a ceiling.
- Assuming the rate you see advertised is the rate you will get.
Try it yourself
Quick checks. Answers sit tucked under each question.
$60,000 income, no debts, 20% down, 6%, 30 years, $200 tax/ins?
Max housing $1,400.00; price about $218,000.
$90,000 income, $500 debts, 10% down?
Max housing $2,250.00 minus debts cap; price lower than the no debt case.
$72,000 income, $400 debts, 20% down, 6.5%, 30 years, $300 tax/ins?
Max housing $1,680.00; price about $273,900.
Questions
What is the 28/36 rule?
Housing no more than 28 percent of gross income, total debt no more than 36 percent. The lower limit wins.
Does this include tax and insurance?
Yes. Enter monthly tax and insurance; they are subtracted before principal and interest.
Can I afford more than this says?
Some lenders stretch ratios with strong credit or assets, but it costs more over time. Treat this as a ceiling.
What about closing costs?
Closing costs, moving, and repairs are outside this math and add thousands at closing.
Does down payment change the price?
Yes. A bigger down payment lowers the loan and can raise the price you can afford for the same payment.
Is preapproval different?
Yes. A lender preapproval verifies income, credit, and documents; this page is only an estimate.