Home Affordability Calculator
Find out how much house you can afford based on your income, debts, and down payment — using the lender debt-to-income rule, with property taxes, insurance, and PMI included.
How much house can you afford? This works the way lenders do — from your income, debts, and down payment — and backs into a realistic home price that includes taxes, insurance, and PMI, not just principal and interest.
Gross annual income
Your household's total income before taxes — the figure lenders qualify you on.
Monthly debt payments
Your other minimum monthly debt payments — car loans, student loans, credit cards, personal loans. Don't include rent or current housing.
Down payment
Cash you'll put down. Reaching 20% of the price avoids PMI; below that, PMI is added.
Interest rate
Loan term
Property tax rate
Homeowners insurance
Property tax rate and annual homeowners insurance — both fold into your real monthly payment.
Comfort level
How aggressively to stretch the debt-to-income limits. Conservative is the classic safe rule; aggressive approaches what some lenders will approve.
Home Price You Can Afford
$287,000
with $40,000 down (13.9%) at 6.5%
Your income sets the ceiling
Your budget is capped by the 28% housing ratio rather than your debts — the healthier position. A lower rate, a longer term, or a bigger down payment would each stretch it further. And remember this is built on gross income: that payment is 28% of your pre-tax income, but a noticeably bigger share of your take-home pay once taxes and retirement savings come out — which is exactly why a lender's max often feels higher than what's comfortable. Many buyers deliberately shop below this ceiling. Your down payment is under 20%, so this includes about $124/mo of PMI — getting to 20% down would remove it and lift your budget.
This estimates what you might qualify for, not what you should spend, and it isn't financial advice or a loan approval. It applies the standard debt-to-income rule at your chosen comfort level and includes estimated property tax, homeowners insurance, and PMI (when down payment is under 20%) — but not HOA dues, utilities, maintenance, or closing costs. Lenders also weigh your credit score, assets, employment, and loan type, so your real pre-approval may differ. Treat the result as a starting point and get a pre-approval from a lender.
💡About this calculator▼
Before you fall in love with a listing, it helps to know your number. "How much house can I afford?" comes down to how lenders qualify you: not your dream budget, but the payment your income can support after your existing debts. This calculator works the way a lender does and gives you a realistic home price to shop within.
Enter your income, your other monthly debt payments, your down payment, and a few loan details, and you'll get the home price you can afford, the loan amount, and the full monthly payment — including the property taxes, insurance, and PMI that a "just principal and interest" estimate leaves out.
It's built on the debt-to-income (DTI) rule lenders actually use, and it tells you something most affordability calculators don't: which factor is holding you back. If your income is the ceiling, that's the normal case; if your existing debt is the limit, paying it down is often the fastest way to raise your budget. This estimates what you might qualify for — not what you should spend, and not a loan approval.
Lenders qualify you using two debt-to-income ratios, and your budget is whichever one is more limiting.
The front-end ratio says your monthly housing payment shouldn't exceed a set percentage of your gross monthly income (28% in the classic rule). The back-end ratio says your housing payment *plus* all your other debt payments — car, student loans, credit cards — shouldn't exceed a higher percentage (36% classically). Your maximum housing payment is the lower of those two caps. The comfort level you choose sets the percentages: Conservative uses 28/36, Moderate 31/43, and Aggressive 36/45 (closer to what some lenders will stretch to).
That maximum payment is a full PITI budget — Principal, Interest, Taxes, and Insurance — not just the loan payment. So the calculator works backward from it: it subtracts the monthly property tax (your tax rate applied to the home value) and insurance, and what's left is what can go toward principal and interest. From that, and your rate and term, it solves for the largest loan — and therefore the largest home price — that fits.
If your down payment is under 20% of that price, it adds PMI (private mortgage insurance) and re-solves, since PMI eats into the budget. There's a neat wrinkle it handles: if you're close to 20% down, you can sometimes afford a *higher* price by stopping exactly at the 20%-down point and avoiding PMI altogether — the calculator finds that sweet spot. The exact formula and a worked example are below.
📐How it's calculated▼
The calculation runs in two steps: find the payment budget, then convert it to a price.
Step 1 — Maximum monthly housing payment (PITI): Front-end cap = Gross monthly income × front-end % (e.g. 28%) Back-end cap = Gross monthly income × back-end % (e.g. 36%) − Other monthly debts Max payment = the lower of the two
Step 2 — Convert that payment into a home price: The payment must cover principal & interest on the loan, plus monthly taxes and insurance: Payment = (Price − Down payment) × loan factor + Price × (tax rate ÷ 12) + Insurance ÷ 12 (+ PMI if down < 20%) Solving for Price gives the most home that fits the budget.
Example: $90,000 income, $500/mo other debts, $40,000 down, 6.5% over 30 years, 1.1% tax, $1,800/yr insurance, Conservative (28/36)
→ Gross monthly income: $7,500
→ Front-end cap: 28% × $7,500 = $2,100. Back-end cap: 36% × $7,500 − $500 = $2,200. The lower is $2,100, so income is the limit.
→ Working backward from $2,100 (with taxes, insurance, and — since $40k is under 20% — PMI): about a $287,000 home, a $247,000 loan, and a payment of roughly $1,561 P&I + $263 tax + $150 insurance + $124 PMI.
Raise the down payment, lower the rate, or pay off debt, and that number moves.
📎Source: Consumer Financial Protection Bureau (CFPB) — Buying a House
🔍Finding your inputs▼
Gross annual income: Your total household income before taxes and deductions — salary, plus stable additional income a lender would count. This is what the ratios are applied to, so use the figure you could document.
Monthly debt payments: The minimum monthly payments on your other debts — car loans, student loans, credit card minimums, personal loans, child support. Do not include your current rent or mortgage (you're replacing that) or everyday expenses like groceries and utilities (lenders don't count those in DTI). This is the number that drives the back-end ratio.
Down payment: The cash you'll put toward the purchase. It directly raises the price you can afford and determines PMI: at 20% or more of the price there's no PMI; below that, PMI is added to the monthly cost. A bigger down payment helps on both fronts.
Interest rate, loan term: The rate you expect and the loan length (15, 20, or 30 years). A lower rate or longer term lowers the monthly payment, which lets the same budget stretch to a higher price — though a longer term means far more total interest.
Property tax rate: Annual property tax as a percentage of the home's value. The national average is roughly 1.1%, but it ranges from under 0.5% to over 2% by location, and it meaningfully changes how much house your budget buys — look up your county's rate for accuracy.
Homeowners insurance: Your estimated annual premium. It's a smaller piece than taxes but still part of the real monthly payment.
Comfort level: How far to stretch the DTI limits. Conservative (28/36) is the time-tested safe rule and a good default. Moderate (31/43) reflects common approvals, especially with strong credit. Aggressive (36/45) approaches the upper end some lenders allow — it shows a bigger number, but qualifying for a payment isn't the same as it being comfortable to live with.
⚠️Special situations▼
My result says my debt is the limit (orange) — what do I do?
It means your back-end ratio is binding: your housing budget is capped by your total debt load, not your income. The high-leverage move is paying down (or paying off) a monthly debt — a car loan or credit card balance especially. Because the back-end ratio counts the monthly payment, eliminating a $400/mo car payment can raise your home budget by tens of thousands, often more than the same money put toward a down payment would. Run the calculator with the debt removed to see the jump.
Should I make a bigger down payment to avoid PMI?
Reaching 20% down removes PMI, which frees up budget — and the calculator already finds the case where stopping exactly at 20% down lets you afford a higher price than going lower with PMI. But 20% isn't mandatory: many buyers put down 5–10%, accept PMI, and buy sooner, then drop PMI later once they reach 20% equity. Try your down payment at a few levels here. More down always helps affordability; whether to wait and save for 20% is a trade-off between buying now and a lower payment.
The number looks high — can I really afford that?
Qualifying and affording comfortably are two different things, and this shows the former. A big reason it feels high: lenders (and this calculator) qualify you on gross, pre-tax income, but you make the payment out of take-home pay — so a payment that's 28% of gross can be 35% or more of what actually lands in your bank account. On top of that, maxing out your DTI leaves little room for retirement contributions, emergencies, home maintenance (budget roughly 1% of the value per year), and the lifestyle you want. Many financial planners suggest keeping your housing payment closer to 25–28% of gross income regardless of what you qualify for — so the Conservative setting, or even a price below the result, is often the wiser target. The calculator shows the ceiling; your comfortable number is usually under it.
How is this different from getting pre-approved?
This is a fast estimate using the standard DTI rule; a pre-approval is a lender's conditional commitment after reviewing your actual credit report, income documents, assets, and the loan program. A lender may approve more or less than this shows — credit score and loan type (FHA, VA, conventional) shift the ratios and the rate. Use this to set your search range and understand the levers, but get a pre-approval before you shop seriously, since sellers expect it and it reflects your true numbers.
My income varies (self-employed, commission, bonuses)
Use a conservative, documentable figure. Lenders typically average self-employment or commission income over the last two years and may discount it, so don't enter your best year. For variable income, lean toward the lower end and the Conservative comfort level — both because the lender will, and because a payment based on peak income gets uncomfortable in a slow month. If a large share of your income is bonus or commission, expect a real pre-approval to come in below a simple calculation on your gross.
❓Common questions▼
How much house can I afford on my income?
A common rule of thumb is that your home should cost about 3 to 4 times your gross annual income, but the real answer depends on your debts, down payment, interest rate, and local taxes. Lenders cap your housing payment at roughly 28% of gross monthly income (and total debt at about 36%), so on a $90,000 income with modest debts and a typical down payment, that often works out to a home in the high-$200,000s. Enter your specifics above for a number based on your actual situation rather than a rule of thumb.
What is the 28/36 rule?
It's the classic mortgage qualification guideline: your monthly housing payment should be no more than 28% of your gross monthly income (the front-end ratio), and your total monthly debt — housing plus car, student, and credit card payments — should be no more than 36% (the back-end ratio). Lenders use ratios like these to decide how much you can borrow. This calculator uses 28/36 on the Conservative setting and offers higher limits (31/43, 36/45) that reflect what lenders will sometimes approve.
Does my debt affect how much house I can afford?
Significantly. The back-end ratio counts your housing payment plus all other monthly debt, so every dollar of car, student loan, or credit card payment directly reduces what's left for a mortgage. If your debt is the binding limit, paying it off can raise your home budget by far more than the payment itself — eliminating a $400/mo car loan can add tens of thousands to your price range. The calculator flags when debt (rather than income) is what's holding your budget back.
Should I include taxes and insurance when figuring out affordability?
Absolutely — leaving them out is the most common way people overestimate what they can afford. Lenders qualify you on the full PITI payment (principal, interest, taxes, and insurance), and taxes plus insurance can be 20–30% of the monthly cost. A calculator that uses only principal and interest can suggest a home that's well out of reach once the real payment is figured. This one includes estimated taxes, insurance, and PMI so the price reflects your actual monthly obligation.
How much should I spend versus how much I qualify for?
They're often very different, and the gap matters. Qualifying for a payment maxes out the lender's limits, leaving little for retirement saving, emergencies, maintenance, and everyday life. Many financial planners suggest keeping the housing payment around 25–28% of gross income, which is more conservative than the maximum a lender allows. A good approach: use this calculator to find your ceiling, then deliberately shop below it for breathing room. The Conservative comfort level is the closest setting to that prudent target.