Lenders typically limit housing costs to 28% of gross income and total debt to 36% (some allow up to 43–50%). Being approved for a loan doesn’t mean it fits your budget – leave room for savings and repairs.
How to use the Home Affordability Calculator
- Gross monthly income
- Other monthly debt payments
- Limit
- Maximum monthly housing payment
- Money for the down payment
- Interest rate
- Loan term
- Property tax (yearly)
- Homeowner insurance (yearly)
- Closing costs (% of price)
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter your gross monthly income, monthly debts, down payment, interest rate, term, property tax and insurance.
Tips
- Get a written loan estimate and compare the APR, not just the interest rate.
- Include property tax, insurance, HOA fees and maintenance in your monthly budget.
- A larger down payment lowers the payment and can remove mortgage insurance.
- Rates change daily – use a current quote for the most accurate result.
Common mistakes to avoid
- Looking only at the monthly payment instead of the total cost of the loan.
- Forgetting closing costs and fees.
- Assuming home prices always rise.
Inputs explained
| Field | What to enter |
|---|---|
| Gross monthly income | Amount in your currency |
| Other monthly debt payments | Amount in your currency |
| Limit | Choose one: 28/36 rule (conventional), 31/43 (FHA), Custom maximum payment |
| Maximum monthly housing payment | Amount in your currency |
| Money for the down payment | Amount in your currency |
| Interest rate | In % |
| Loan term | Units: years, months |
| Property tax (yearly) | Amount in your currency |
| Homeowner insurance (yearly) | Amount in your currency |
| Closing costs (% of price) | In % |
What each result means
- Available for principal and interest = max([Maximum monthly housing payment] – [Property tax (yearly)]÷12 – [Homeowner insurance (yearly)]÷12, 0)
- Maximum loan = pvann([Interest rate]÷1200, [Loan term], [Available for principal and interest], 0)
- Maximum home price = ([Maximum loan] + [Money for the down payment])÷(1 + [Closing costs (% of price)]÷100)
- Closing costs = [Maximum home price]×[Closing costs (% of price)]÷100
- Front-end ratio = [Maximum monthly housing payment]÷[Gross monthly income]×100
- Back-end ratio = ([Maximum monthly housing payment] + [Other monthly debt payments])÷[Gross monthly income]×100
Example values
How the main result changes when Gross monthly income changes and everything else stays at the example values above:
| Gross monthly income | Maximum home price |
|---|---|
| 4,500 | 130,445.71 |
| 6,750 | 254,863.93 |
| 9,000 | 360,849.82 |
| 11,250 | 457,619.54 |
| 13,500 | 554,389.27 |
| 18,000 | 747,928.72 |
Formula
Max housing payment = min(28% × income, 36% × income − other debts) (or your chosen payment)Max P&I = max housing − (property tax + insurance) ÷ 12Max loan = P&I × (1 − (1 + i)^−n) ÷ iMax price = max loan + down payment − closing costsWorked example
Inputs — Gross monthly income: $9,000; Other monthly debt payments: $600; Limit: 28/36 rule (conventional); Maximum monthly housing payment: $2,500; Money for the down payment: $60,000; Interest rate: 6.5 %; Loan term: 30 years; Property tax (yearly): $4,800; Homeowner insurance (yearly): $1,800; Closing costs (% of price): 3 %.
Results — Maximum monthly housing payment = $2,520.00; Available for principal and interest = $1,970.00; Maximum loan = $311,675.31; Maximum home price = $360,849.82; Closing costs = $10,825.49; Front-end ratio = 28 %; Back-end ratio = 34.67 %.
Frequently asked questions
How much house can I afford?
Commonly about 3–4 times your gross annual income, depending on rates and debts.
What is the 28/36 rule?
Housing costs ≤ 28% of gross income and total debts ≤ 36%.
Do lenders include property tax and insurance?
Yes – they count the full PITI payment.
What formula does the Home Affordability Calculator use?
Max housing payment = min(28% × income, 36% × income − other debts) (or your chosen payment).