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House Affordability Calculator

Find out how much house you can afford based on your income, debts, and down payment. Uses the 28/36 DTI rule used by mortgage lenders.

Calculation Inputs

Car loans, student loans, credit card minimums, etc.

Typically 0.25–1% of home value annually.

Results computed instantly — your data never leaves your device.

Live Results

Real-Time

Max Home Price

$400,693

Max Loan Amount

$340,693

Max Monthly PITI

$2,800.07

Monthly Income

$10,000

Front-End DTI

28%

Limit: 28%

Back-End DTI

33%

Limit: 36%

Down Payment %

15%

Binding Constraint

Front-end DTI (28% limit)

100% Client-SidePrivate & Secure

Monthly Payment Breakdown

Principal & Interest$2,232.42 (80%)
Property Tax$400.69 (14%)
Home Insurance$166.96 (6%)

⚠ PMI (Private Mortgage Insurance) may apply if down payment is under 20% — typically 0.5–1.5% of the loan per year. Down payment is currently 15%.

How to Use the House Affordability Calculator

  1. 1

    Enter your annual gross income (before taxes) and total monthly debt payments (car, student loan, credit cards).

  2. 2

    Enter your available down payment, expected interest rate, and loan term.

  3. 3

    Adjust property tax rate (varies by state/county), home insurance rate, and any HOA fees.

  4. 4

    The calculator shows your maximum home price based on the 28/36 DTI rule used by most lenders.

Formula & Mathematical Basis

Front-End Limit: Max PITI = Monthly Income × (FrontEndDTI ÷ 100) Back-End Limit: Max PITI = Monthly Income × (BackEndDTI ÷ 100) − Monthly Debts Max PITI = min(Front-End Limit, Back-End Limit) Max P&I = Max PITI − Monthly Tax − Monthly Insurance − HOA Max Loan = Max P&I × [(1+r)^n − 1] ÷ [r × (1+r)^n] Max Home Price = Max Loan + Down Payment

Variable Key

PITI

Principal, Interest, Taxes, Insurance — total monthly housing cost

DTI

Debt-to-Income ratio, expressed as a percentage of gross monthly income

r

Monthly interest rate = Annual Rate ÷ 12 ÷ 100

n

Total monthly payments = loan term years × 12

Max P&I

Maximum allowable principal and interest payment after subtracting tax, insurance, and HOA from max PITI

📝 Property tax and insurance scale with home price, so the formula is solved iteratively. Starting with an estimate of Max P&I, the calculator converges on the correct home price within 6 iterations. FHA loans allow DTI up to 43/50%; jumbo loans are stricter.

Step-by-Step Examples

1

Dual-income household — $150k combined income

Scenario: $150,000 annual income, $800/mo existing debts, $60,000 down, 6.85% rate, 30-year term, 1.2% tax, 0.5% insurance.

  1. 1.Monthly income = $150,000 ÷ 12 = $12,500.
  2. 2.Front-end limit (28%): Max PITI = $12,500 × 0.28 = $3,500.
  3. 3.Back-end limit (36%): Max PITI = $12,500 × 0.36 − $800 = $3,700.
  4. 4.Binding constraint: front-end ($3,500).
  5. 5.Subtract estimated tax+insurance (≈1.7% ÷ 12 of home price) and iterate to find Max P&I.
  6. 6.Max loan ≈ $378,000; Max home price = $378,000 + $60,000 ≈ $438,000.
✅ Maximum home price: ~$438,000 | Max PITI: ~$3,500/mo

Practical Use Cases

  • Pre-qualification estimate before meeting with a mortgage lender
  • Setting a realistic home search budget on Zillow or Redfin
  • Understanding how paying off debts increases buying power
  • Comparing affordability across different interest rate scenarios
  • Determining how much more down payment is needed to qualify for a specific home
  • Exploring the effect of a co-borrower on maximum loan amount

Common Pitfalls

  • Using net income instead of gross income — lenders qualify based on pre-tax income.
  • Omitting non-mortgage debts — even a $300/mo car payment meaningfully reduces max home price.
  • Not budgeting for PMI when down payment is under 20% — it can add $150–$400/mo.
  • Ignoring closing costs (2–5% of purchase price) that reduce available cash for down payment.
  • Assuming approval at the maximum limit — qualifying for a loan and comfortably affording it are different.

Frequently Asked Questions

What is the 28/36 rule?

Lenders typically require your monthly housing costs (PITI) to be no more than 28% of gross monthly income (front-end DTI), and total debt including housing to be no more than 36% (back-end DTI). The calculator finds the maximum home price that satisfies both limits.

What counts as monthly debt?

Include all recurring minimum debt payments: car loans, student loans, personal loans, and minimum credit card payments. Do not include utilities, groceries, or subscriptions — only loan/debt obligations.

Should I include PMI in affordability calculations?

Yes, if your down payment is less than 20%. PMI typically costs 0.5–1.5% of the loan amount annually. Add it to your estimated monthly costs. PMI is automatically cancelled when your loan balance reaches 80% of home value.

How does down payment affect affordability?

A larger down payment reduces the loan amount, lowering your monthly P&I payment. It also eliminates PMI above 20% down. Even a 5% increase in down payment can significantly raise the maximum home price you qualify for.

What is the difference between front-end and back-end DTI?

Front-end DTI = housing costs ÷ gross income. Back-end DTI = (housing + all debts) ÷ gross income. The calculator uses whichever limit is more restrictive, which is how actual lenders underwrite mortgages.

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