Buying a home is a big financial decision. This home affordability calculator helps you estimate how much house you can afford based on your income, monthly debts, down payment, interest rate, property taxes, insurance, HOA dues and target debt-to-income (DTI) ratios.
How much house can I afford?
How to use this home affordability calculator
The calculator starts from the same basic math that mortgage lenders use: your gross monthly income, your recurring monthly debts and your target debt-to-income (DTI) ratios. Here is how to walk through the inputs step by step.
1. Enter your annual gross income
Start with your annual gross income, which is your income before taxes and payroll deductions. For most people, this includes salary and regular wages. You can also include stable bonuses, commissions, self-employment income, or side gigs if they are likely to continue and would be considered by a lender.
The calculator converts your annual income to a gross monthly income. Lenders base their DTI calculations on gross income, not take-home pay, which is why the numbers might look higher than what you are used to seeing in your bank account each month.
2. Add your monthly non-housing debts
Next, enter your monthly non-housing debts. This should include payments that will still be around after you buy a home, such as:
- Student loans
- Auto loans and leases
- Credit card minimum payments
- Personal loans
- Alimony or child support
Do not include general living expenses like utilities, groceries, streaming services or car insurance here. Those come out of your remaining budget after your mortgage and debt payments. The calculator uses your monthly debts to estimate how much room is left for a housing payment under your chosen DTI limits.
3. Choose loan term and interest rate
Most buyers use a 30-year fixed-rate mortgage, which is the default in the calculator. You can change the term to 15, 20 or any number of years between 1 and 40. Shorter terms have higher payments but lower total interest costs; longer terms have lower monthly payments but more interest over time.
Then set your best guess for the interest rate (APR). You can use current advertised rates as a starting point, but remember that the rate you personally qualify for will depend on your credit profile, down payment, loan type and market conditions at the time you lock.
4. Estimate your down payment and PMI
The down payment percentage determines how much of the purchase price you pay upfront versus how much you finance as a mortgage. For example, on a $400,000 home, a 10% down payment is $40,000, and your loan amount is roughly $360,000 before closing costs.
If your down payment is below 20% on many conventional loans, you may pay private mortgage insurance (PMI). The calculator lets you enter a PMI rate so it can include that cost in your total monthly payment. If your down payment is 20% or more, PMI is set to zero in the calculation.
5. Include property taxes, homeowners insurance and HOA dues
Your mortgage payment is more than just principal and interest. Lenders often look at your full PITI + HOA:
- Principal and interest (P&I): The core loan payment.
- Property taxes: Usually set as a percentage of the home’s value each year, then divided by 12.
- Homeowners insurance: An annual premium, divided by 12 for monthly budgeting.
- PMI: Added when your down payment is below 20% on many conventional loans.
- HOA dues: Monthly fees if you buy in a community or condo with a homeowners association.
These items are sometimes collected in an escrow account, so your lender can pay taxes and insurance when they come due. In the calculator, they are all added together to reflect your true monthly housing cost.
6. Pick a DTI profile (conventional, FHA or custom)
The last major input is your DTI profile. This describes how much of your income you are comfortable allocating to housing and total debt. The calculator offers common presets:
- Conventional (28/36): A traditional rule of thumb where housing costs are capped around 28% of gross income and total debts around 36%.
- FHA (31/43): A common guideline for FHA loans, allowing a higher share of income for housing and total debts.
- Custom: You can enter your own front-end (housing) and back-end (total) DTI limits if you want to be stricter or more flexible.
The calculator uses whichever constraint is tighter at your inputs and labels it as the binding limit on the results card.
How this home affordability calculator works behind the scenes
Under the hood, the calculator works the way many underwriting engines do: it looks at your income, your debts, your DTI targets and the full monthly cost of owning a home, and then solves for the highest home price that still fits those limits.
Step 1: Calculate your allowed housing payment from DTI
First, the calculator converts your annual income to a monthly amount and applies your chosen front-end and back-end DTI ratios:
- Front-end (housing) limit: maximum percentage of gross monthly income that can go to housing (P&I, taxes, insurance, PMI, HOA).
- Back-end (total) limit: maximum percentage that can go to housing plus all other monthly debts combined.
For example, with a $120,000 annual income, your gross monthly income is $10,000. At a 28/36 DTI profile:
- Front-end cap: 28% of $10,000 = $2,800 for housing.
- Back-end cap: 36% of $10,000 = $3,600 for all debts.
If you already have $500 per month in other debts, the back-end limit for housing becomes $3,600 minus $500, or $3,100. The calculator then uses the tighter of the two numbers — $2,800 in this example — as the maximum affordable housing payment.
Step 2: Build the full monthly payment (PITI + PMI + HOA)
Next, the calculator uses the loan term and interest rate to compute a principal and interest payment with the standard fixed-rate mortgage formula (the same one behind Excel’s PMT function). Then it layers in:
- Property taxes as an annual percentage of the home’s price, divided by 12.
- Homeowners insurance, entered as an annual dollar amount, divided by 12.
- PMI, if your down payment is below 20% and you entered a PMI rate.
- HOA dues as a flat monthly amount.
All of these pieces are added together to form your total monthly housing payment. On the results card, you will see a visual bar that shows how much of that payment is P&I versus PMI, taxes, insurance and HOA.
Step 3: Solve for the maximum home price
With a target housing payment in hand (for example, $2,800) and the assumptions above, the calculator works backwards to find the highest home price that keeps your total monthly payment at or below that number. It does this by running an efficient search over possible home prices until it finds the point where the monthly payment would just hit your DTI-based limit.
The output then shows:
- Max home price: An estimate of the purchase price that fits your inputs.
- Estimated loan amount and down payment: Based on the down payment percentage you entered.
- Total monthly payment: Including principal, interest, PMI (if any), taxes, insurance and HOA.
- Housing DTI at this price: The share of your gross income going to housing.
- Total DTI with other debts: The share going to housing plus your other monthly debts.
- Binding limit: Whether the front-end or back-end DTI was the tighter constraint.
If your chosen DTI limits leave no room for a new housing payment after your existing debts, the calculator will tell you there is “No room for additional housing payment at these DTI limits” and show your current total DTI based on debts alone.
What is a “good” DTI for a mortgage?
There is no single perfect DTI number that applies to every borrower, but there are common guidelines used across lenders and loan programs. Many conventional lenders use the 28/36 rule as a benchmark, meaning no more than about 28% of gross income going to housing and 36% to all debts combined. FHA guidelines are often described as 31/43, allowing a higher share of income toward housing and total debt. VA and USDA loans use their own standards, and some programs allow even higher DTIs with strong compensating factors such as high credit scores, large cash reserves or significant down payments.
It is also common for lenders to approve loans above these “classic” thresholds, especially when automated underwriting systems determine that the risk is acceptable. However, just because a lender is willing to approve a higher DTI does not mean it is comfortable for your budget. Use the DTI profile in this calculator to explore more conservative limits as well as more aggressive ones, and pay attention to how your monthly payment and total DTI feel in the context of your other goals.
Income examples: How much house can I afford?
The numbers from this calculator will vary depending on your interest rate, local tax rate, insurance costs, HOA dues and debt load. Still, it can be helpful to see a few simplified examples to understand how the pieces fit together. In all of these cases, assume no HOA dues, a moderate property tax rate and a 10% down payment.
Example 1: Household earning $80,000 per year
With $80,000 of gross income, your gross monthly income is about $6,667. Under a 28/36 profile:
- Housing cap (28%): roughly $1,867 per month.
- Total debt cap (36%): roughly $2,400 per month.
If you have $300 per month in other debts, the back-end limit for housing becomes about $2,100. The calculator will use the tighter of the housing and total limits and then work backwards from there using your interest rate, taxes, insurance and down payment to estimate a home price that keeps your payment within those boundaries.
Example 2: Household earning $120,000 per year
With $120,000 of income, your gross monthly income is $10,000. At 28/36 with $500 in other monthly debts:
- Housing cap: 28% of $10,000 = $2,800.
- Total cap: 36% of $10,000 = $3,600; minus $500 other debts = $3,100 remaining for housing.
In this case, the front-end housing limit is binding at $2,800. The calculator will search for a home price where your P&I, taxes, insurance, PMI and HOA together come out to roughly that number. On the results card, you will see a housing DTI around 28% and a total DTI around 33% with these assumptions.
Example 3: Household earning $60,000 per year with higher debts
With a $60,000 income (gross monthly income of $5,000) and a 28/36 profile:
- Housing cap: 28% of $5,000 = $1,400.
- Total cap: 36% of $5,000 = $1,800.
If you already have $700 in monthly debts, the back-end limit allows only about $1,100 for housing, which is tighter than the 28% housing limit. In this scenario, your other loan payments reduce how much house you can afford more than your income level does. Paying down high-interest debts before buying might expand your budget significantly.
Factors that change how much house you can afford
Two households with the same income can afford very different home prices depending on their debts, interest rate, down payment and local costs. Here are some of the biggest levers you can control.
Interest rate and loan term
Your mortgage interest rate has a major impact on your monthly payment and thus how much house you can afford. A lower rate means more of each payment goes toward principal instead of interest, which stretches your budget. The loan term also matters: shorter terms have higher payments and reduce affordability, while longer terms lower payments but increase total interest costs over time.
Down payment and PMI
A larger down payment does two things at once: it lowers your loan amount and may let you avoid PMI on conventional loans. That combination reduces your monthly payment and improves your DTI. On the other hand, stretching too far for a down payment and draining your savings can leave you with little cushion for repairs, moving costs or emergencies. The calculator lets you experiment with different down payment percentages to find a balance that feels right.
Property taxes, insurance and HOA dues
Property taxes, homeowners insurance and HOA dues can vary dramatically by location and property type. A home in a high-tax area or with high HOA fees might reduce your affordable price point even if the base home price looks similar to homes elsewhere. When you are shopping, compare not just list prices, but also estimated monthly taxes, insurance and HOA costs, and plug those into the calculator for each scenario.
Existing debts and credit profile
Your existing debts and credit profile affect both your DTI and the interest rate you are offered. Paying down credit cards, auto loans or personal loans before you buy can improve your DTI and help you qualify for better rates. At the same time, avoiding new debt, big purchases and unnecessary credit inquiries in the months before your mortgage application can help keep your ratios strong.
Loan type and lender guidelines
Conventional, FHA, VA and USDA loans each have their own DTI standards and underwriting rules. Some loan types may allow higher DTI ratios if you have strong compensating factors, while others are stricter. The calculator gives you control over the DTI limits so you can approximate the rules of different programs, but your actual approval will depend on the specific lender and product.
How to improve your home affordability before you buy
If the calculator suggests a lower price range than you hoped for, you have several options to improve your affordability over time. None of these changes happen overnight, but each one can move your DTI and monthly payment in a healthier direction.
- Pay down high-interest debts to reduce your back-end DTI.
- Avoid taking on new loans or big credit card balances before applying.
- Work on increasing income through raises, job changes or additional work that is likely to be counted by lenders.
- Save for a larger down payment to reduce your loan amount and possibly eliminate PMI.
- Compare homes in different neighborhoods or price bands where taxes, insurance and HOA fees are lower.
- Shop around with multiple lenders to see how different rates and programs affect what you can afford.
It is usually better to choose a slightly smaller, more affordable home and keep room in your budget for savings, retirement contributions and emergencies than to stretch to the maximum payment a lender might approve.
Frequently Asked Questions (FAQs)
How accurate is this home affordability calculator?
This calculator uses the same basic math as many lenders: it looks at your gross monthly income, your monthly debts, your target DTI limits and a full estimate of your housing costs (P&I, taxes, insurance, PMI and HOA). It can give you a realistic range for planning, but it does not account for every detail that underwriting systems consider, such as credit scores, reserves, property type or manual exceptions. Treat it as a planning tool, not a loan approval.
Should I follow the 28/36 rule exactly?
The 28/36 rule is a long-standing guideline, not a hard law. Many borrowers end up slightly above or below those numbers. Some loan programs allow higher DTIs, especially with strong compensating factors, while others may prefer more conservative ratios. The key question is whether your payment leaves enough room for savings, other goals and unexpected expenses. If you want extra safety, you can set stricter custom DTI limits in the calculator.
Does this calculator work for FHA, VA or USDA loans?
Yes. The calculator does not lock you into one loan type. Instead, it lets you adjust the front-end and back-end DTI limits to approximate different program rules. For FHA, you might use something like 31/43. For VA and USDA, you can research typical DTI guidelines and enter similar ranges. The numbers here will be close, but your lender will still make the final call based on program-specific underwriting.
Should I use gross income or take-home pay?
Lenders base DTI on gross income, so this calculator also uses gross income to stay consistent with how mortgages are underwritten. However, it is wise to cross-check the result against your take-home pay and monthly budget. If a payment that looks comfortable based on gross income feels tight based on what actually lands in your bank account, consider lowering your DTI limits in the calculator.
Does this calculator include closing costs?
No. The affordability calculation focuses on your ongoing monthly payment and your down payment percentage. You will also need cash for closing costs, prepaid taxes and insurance, and possibly reserves required by your lender. A common rule of thumb is to budget several percent of the purchase price for closing costs, though the exact amount depends on your location and loan type. Be sure to keep enough savings on hand to cover these one-time expenses.