House Affordability Calculator

How to use the house affordability calculator

Enter your household's annual income before tax, the total of your monthly debt payments (car loans, student loans, credit card minimums and other loans — but not rent, which the mortgage will replace) and the cash you have for a down payment. Add the mortgage rate and term you expect, plus local property tax, insurance and any HOA or service charge. The calculator finds the highest home price whose full monthly payment stays within both lender ratio limits.

The default limits follow the classic 28/36 rule, but you can change them. The table underneath shows how your budget changes under more conservative or more aggressive lending standards.

How affordability is calculated

Lenders look at two debt-to-income (DTI) ratios, both measured against gross monthly income:

The housing payment includes principal and interest, property tax, insurance, mortgage insurance (PMI) when the down payment is below 20%, and HOA dues. The calculator then searches for the home price at which that complete payment exactly equals your maximum. Because tax and PMI depend on the price, this is solved numerically rather than with a single formula.

Worked example

A household earns $100,000 a year ($8,333 a month), pays $500 a month on other debts and has $60,000 saved for a down payment. Rates are 6.5% for 30 years, property tax is 1.1% and insurance $1,500 a year.

• Front-end limit: 28% × $8,333 = $2,333
• Back-end limit: 36% × $8,333 − $500 = $2,500

The lower figure, $2,333, is the budget. The calculator finds an affordable price of about $341,000: a loan of $281,334 costing $1,778 in principal and interest, $313 of property tax, $125 of insurance and $117 of PMI (since $60,000 is just under 20% of the price). If this household's debts were $1,200 a month instead, the back-end ratio would bind and the price would fall to about $284,000 — which shows how strongly existing debt reduces buying power.

What changes how much house you can afford

Interest rates

With the same budget, a 5.5% rate supports about $367,000 and a 7.5% rate about $319,000. Each percentage point moves buying power by roughly 7–10%.

Debts

Every $100 of monthly debt you pay off can add around $13,000–$15,000 of buying power at today's rates, if the back-end ratio is your limit. Check your current ratios with the debt-to-income ratio calculator.

Down payment

A larger down payment both reduces the loan and can remove PMI once it reaches 20%. Plan your savings with the down payment calculator.

Loan type and country

Limits vary. US government-backed loans such as FHA often allow a 31% front-end and 43% or higher back-end ratio. Lenders in the UK typically cap borrowing at around 4–4.5 times income and apply stress tests, while Canada uses gross and total debt service ratios with a qualifying rate above the contract rate. Use the ratio fields to match your local rules.

Affording vs qualifying

A lender's maximum is not the same as a comfortable budget. Lender ratios ignore childcare, commuting, retirement saving and the maintenance a home needs — often 1% or more of its value each year. Many buyers aim below the maximum to keep flexibility. If you are undecided about buying at all, the rent vs buy calculator compares the long-term cost of each option, and the mortgage calculator breaks down the payment on a specific home.

Results are estimates only and not a lending decision or financial advice. Lenders also consider your credit history, employment and savings.