House Affordability Calculator.

Guide

How to use the House Affordability Calculator

Most calculators ask what the house costs and tell you the payment. This one starts with your income and debts and works back to the highest price that fits under standard lending limits.

1. Enter your Annual household income (before tax). Use gross pay for everyone who'll be on the loan, including steady bonuses or commissions.
2. Enter your Monthly debt payments: car loans, student loans and credit card minimums. Rent, utilities and groceries don't belong here; lenders generally count recurring debt payments, not living expenses.
3. Enter the Down payment you have: cash you can bring to closing after setting aside closing costs and a cushion.
4. Set the Interest rate and Loan term you expect to be offered.
5. Enter Property tax as a percent of the price per year, Homeowners insurance in dollars per year, and any HOA dues per month.
6. Check the PMI rate. It's used only if your down payment ends up under 20% of the price the calculator finds.
7. Set the debt-to-income limits: the Housing (front-end) limit and the Total debt (back-end) limit. The defaults are 28 and 36. The presets Conservative 28/36, FHA-style 31/43 and Stretch 33/45 fill them for you; Custom lets you type your own.
8. Read the headline price, the Maximum housing payment and its breakdown, and note which limit is holding you back. The small table shows the conservative, FHA-style and stretch prices side by side.

How the math works

Lenders use two ratios. The front-end ratio caps your total housing payment (principal and interest, property tax, insurance, PMI and HOA dues) at a share of your gross monthly income. The back-end ratio caps housing plus all your other monthly debt payments at a larger share. You have to fit under both, so the lower of the two is your real ceiling.

Once the calculator knows your maximum housing payment, it searches for the price that produces exactly that payment. Price drives everything: the loan is price minus down payment, property tax is a percent of price, and PMI switches on if the down payment is under 20% of price.

Worked example

Your household earns $95,000 a year, you pay $500 a month on a car loan and student loans, and you have $40,000 for a down payment. You expect 6.5% on a 30-year loan, property tax is 1.0%, insurance is $1,500 a year, there's no HOA, PMI would be 0.5%, and you're using the 28/36 limits.

Step	Math	Result
Monthly income	95,000 ÷ 12	$7,916.67
Housing (front-end) limit	7,916.67 × 28%	$2,216.67
Total debt (back-end) limit	7,916.67 × 36% − 500	$2,350.00
Maximum housing payment	lower of the two	$2,216.67 (housing limit binds)
Maximum home price	found by search	about $311,882
Loan amount	311,882 − 40,000	about $271,882

That $2,216.67 splits into roughly $1,718.48 of principal and interest, $259.90 of property tax, $125.00 of insurance and $113.28 of PMI. The PMI is there because $40,000 is only 12.8% of the price. The front-end limit is the one holding you back, which tells you something useful: paying off the car wouldn't raise your price, because the back-end limit still has $133.33 of room.

Swap in the other presets and the picture changes. FHA-style 31/43 lifts the payment to $2,454.17 and the price to about $343,253. Stretch 33/45 gives $2,612.50 and about $364,167: same income, same debts, $52,285 more house.

What moves the number most

Your other debts, once they're big enough. At $500 a month the housing limit binds. Push the debts to $900 and the total-debt limit takes over at $1,950.00, dropping the price to about $276,659; at $1,000 it's about $263,450.

The crossover on this income is $633.33 of monthly debt (8% of gross); past it, every $100 of car payment costs roughly $13,000 of house.

The interest rate. At 5.5% the same buyer qualifies for about $337,108; at 7.5%, about $289,733. That's a swing of about $47,400 on a two-point move.

Taxes and HOA dues. They come out of the housing budget before the loan does. A 2.0% property tax rate instead of 1.0% cuts the price to about $280,956; a $250 HOA fee, to about $278,860.

The down payment. It helps twice: a smaller loan at any price, and once you reach 20% the PMI line disappears, freeing room for a larger loan. With $70,000 down, this buyer lands at $350,000, the highest price at which $70,000 is still a full 20% down and no PMI is charged. Go a dollar higher and PMI switches back on, so the result sits right at that line.

Reading the result honestly

The maximum price is a lending ceiling, not a target. A lender may approve the $311,882 house, but the 28% rule is built on gross income and your take-home is smaller. After the $2,216.67 payment and $500 of debts, this household has $5,200 of gross income left for income tax, retirement, food, cars, kids and repairs.

That's why the table under the results shows the same income under the Conservative, FHA-style and Stretch limits side by side. Many people are happiest buying at or below the conservative figure and putting the difference into savings or a faster payoff. If the comfortable number doesn't buy anything you'd want to live in, the fix is more down payment, less debt or more income, not a bigger ratio.

When to use the other calculators

Once you have a price in mind, move to the Mortgage Calculator to see the full payment on a specific house with its real tax rate and insurance quote. The Amortization Calculator shows how the balance falls year by year. If a car payment is holding your price down, the Auto Loan Calculator shows what a cheaper car or shorter term would free up.

What this calculator doesn't do

The result is an estimate built on rules of thumb. A lender's decision also depends on your credit score, employment history, reserves, the loan program and the appraisal, and lenders apply their own ratio limits. The lender's pre-approval letter governs, not this page.

It doesn't include closing costs, moving expenses, repairs or utilities, and it assumes a fixed-rate loan with conventional-style PMI. It also treats your income as steady; if your pay varies, a lender will usually average it.

Frequently asked questions

Estimates for planning only. Your lender, dealer or tax authority sets the real numbers, and rates, fees and rules change. This is not financial, tax or legal advice. Nothing you type here leaves your browser. See the terms of use.