House Affordability Calculator
Find out how much house you can afford based on your income, debts, and down payment using the standard 28/36 debt-to-income ratio rule.
How to Use This Calculator
- Enter your annual gross income before taxes.
- Enter total monthly debt payments (car, student loans, credit cards).
- Set your down payment percentage, interest rate, and loan term.
- Adjust property tax rate, home insurance, and HOA if applicable.
- Click "Calculate Affordability" to see the maximum home price and monthly breakdown.
Formula
The front-end DTI limits your housing payment (PITI + HOA) to 28% of gross monthly income. The back-end DTI limits total debt (housing + other debts) to 36%. The calculator uses the lower of the two constraints. The mortgage payment is calculated using the standard amortization formula: M = P × [r(1+r)n] / [(1+r)n − 1].
Examples
$85,000/yr, $0 debt, 20% down, 6.5%, 30yr. Front-end limit: $2,008/mo. Max home price: ~$364,000.
$120,000/yr, $800/mo debt, 20% down, 7%, 30yr. Back-end DTI limits to $2,960 for housing. Max home price: ~$488,000.
On a $100K income, 0% debt: at 5% (30yr) you can afford ~$450K. At 7% (30yr) you can afford ~$375K. A 2% rate increase reduces buying power by ~17%.
Frequently Asked Questions
How much house can I afford?
As a general rule, your monthly housing payment should not exceed 28% of your gross monthly income. This calculator uses the 28/36 rule to determine the maximum home price based on your income, debts, and down payment.
What is the 28/36 rule?
The 28/36 rule is a standard guideline used by lenders. Your housing costs (mortgage, taxes, insurance, HOA) should not exceed 28% of gross income, and your total debt payments should not exceed 36%.
What is DTI (Debt-to-Income)?
DTI is the percentage of your gross monthly income that goes toward paying debts. Front-end DTI considers only housing costs. Back-end DTI includes all debts (housing, car loans, student loans, credit cards).
Should I spend less than the maximum?
Yes. The maximum is the ceiling, not the target. Budget for maintenance, repairs (typically 1–2% of home value per year), utilities, and emergencies. Many financial advisors recommend spending even less than the 28% limit.
How much should I put down?
20% is ideal as it avoids PMI (Private Mortgage Insurance). However, many programs allow 3–5% down. Putting down less means a larger loan, higher monthly payments, and potential PMI costs of 0.5–1% of the loan annually.