Home Affordability Calculator
Work backward from your income to the home price you can realistically afford. Enter your household income, monthly debt payments, and down payment, and the calculator applies the lender’s 28/36 rule to find your maximum home price and the monthly payment that comes with it.
It solves the whole picture, not just principal and interest: property taxes, homeowners insurance, PMI, and HOA dues all come out of the same monthly budget lenders allow. The result is the price ceiling you should shop under — and it flags when your debt-to-income (DTI) ratio, rather than your income, is the real limit.
Home price you can afford
$289,978
$2,100.00/mo · 14% down
- Target loan amount
- $249,978
- Down payment
- $40,000
- Max monthly housing budget
- $2,100.00
Estimated monthly payment
- Principal & interest
- $1,580.03
- Property tax
- $265.81
- Homeowners insurance
- $150.00
- PMI (est. 0.5%)
- $104.16
Limited by the housing share of your income under the guideline you chose. A down payment of 20% or more removes PMI and raises your price.
Calculation Formulas
Lenders cap your housing payment two ways: the front-end ratio limits housing to a share of gross monthly income, and the back-end ratio limits all debt (housing plus car, student, and card payments) to a larger share. The smaller of the two is your true budget.
Example:
On $7,500/month gross income with $500 of other debt, the conservative 28/36 rule allows $2,100 for housing (28%) but only $2,200 − $500 = $1,700 once other debts count — so $1,700 is the ceiling.
Your budget covers principal & interest (X) plus taxes, insurance, PMI, and HOA. Taxes and PMI scale with the home price, so we solve for the P&I payment X directly, where A is the loan supported per $1 of payment and t is the monthly tax rate. Home price = X×A + down payment.
Key Figures
| Figure | Value | Description |
|---|---|---|
| Front-end ratio | 28–36% | Share of gross monthly income allowed for the total housing payment (PITI). |
| Back-end ratio | 36–45% | Share of gross monthly income allowed for all monthly debt payments combined. |
| PMI threshold | 80% LTV | Conventional loans add private mortgage insurance until the loan is 80% or less of the home’s value (20% equity). |
Note: Results are estimates for planning purposes. Rates, fees, taxes, and insurance vary by lender and location — confirm exact figures with a licensed professional before making financial decisions.
Standards & Sources
Last verified: August 2026
- The 28/36 qualifying rule
The front-end (28%) and back-end (36%) debt-to-income limits are the long-standing conventional-lending guideline; the moderate and aggressive options reflect the looser ratios many lenders and loan programs accept in practice.
- CFPB Ability-to-Repay / Qualified Mortgage
Federal Qualified Mortgage rules center on a borrower’s ability to repay, with a back-end DTI of about 43% as a common reference point — which the moderate guideline mirrors.
- Private mortgage insurance (PMI)
On conventional loans with less than 20% down, lenders require PMI (estimated here at 0.5% of the loan per year) until you reach 20% equity. Reaching 20% down removes it and raises the price you can afford.
How to Use This Calculator
- Enter your gross annual household income and your total monthly debt payments (car, student, and credit card minimums).
- Enter your down payment, the interest rate (APR) you expect, and the loan term.
- Adjust the property tax rate, annual home insurance, and any monthly HOA dues for your area.
- Choose a lending guideline (conservative to aggressive) and read the home price you can afford, with the full monthly payment broken down.
Frequently Asked Questions
How much house can I afford on my salary?
A common rule of thumb is that your home price can be roughly 3–5 times your gross annual income, but the accurate answer depends on your down payment, interest rate, other debts, and local taxes. This calculator works out the exact price by applying the 28/36 debt-to-income rule to your specific numbers.
What is the 28/36 rule?
It is the lending guideline that your total housing payment should stay at or below 28% of your gross monthly income (the front-end ratio), and all your debt payments combined should stay at or below 36% (the back-end ratio). The smaller of those two limits sets how much you can afford.
Does a bigger down payment let me buy a more expensive home?
Yes. For the same monthly payment, every dollar of down payment adds directly to the price you can afford, and reaching 20% down removes private mortgage insurance (PMI) — which frees up more of your budget for principal and interest, raising your price further.
Do property taxes and insurance affect how much I can afford?
They do, significantly. Lenders cap your total housing payment (PITI), so higher property taxes, insurance, or HOA dues leave less room for principal and interest — which lowers the home price you qualify for. That is why two buyers with identical incomes can afford very different prices in different areas.
What debt-to-income ratio do mortgage lenders allow?
Conventional loans often go up to a back-end DTI of about 45%, and federal Qualified Mortgage rules use roughly 43% as a reference, while 36% is the more conservative traditional limit. This calculator lets you choose between conservative, moderate, and aggressive guidelines to see the range.
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