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Affordability calculator

How much house your income, debts, and down payment can comfortably support.

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About this calculator

The affordability calculator tells you the maximum home price you can comfortably finance given your income, monthly debts, available down payment, and target debt-to-income ratio. It works by solving the mortgage payment equation in reverse: starting from your housing budget, it finds the home price that produces exactly that monthly cost (including taxes, insurance, and PMI where applicable).

The 28/36 rule

Most lenders use two ratios when underwriting a loan:

  • Front-end DTI (28%) — total monthly housing costs (PITI) divided by gross monthly income.
  • Back-end DTI (36%) — total monthly debt payments (PITI + car loans + student loans + minimum credit card payments) divided by gross monthly income.

A conservative budget targets 28% / 36%. Lenders will often approve up to 43% back-end DTI, but living at the upper limit leaves no buffer for surprises. This calculator uses your back-end DTI directly so existing debts reduce your housing budget honestly.

How more income or less debt changes the answer

The math is dramatically sensitive to two inputs. Every $500/month of debt you eliminate raises your affordable home price by roughly $80,000–$100,000 (depending on rates and term). Every $1,000/month of additional income raises it by a similar amount. Paying off a car loan before house hunting is one of the highest-leverage moves you can make.

Why "approved for" usually overstates what's smart

Lenders quote what they'll approve, not what's comfortable. The approved number assumes 43% DTI, your absolute lowest reasonable cost of living, and no emergency cushion. It's almost always wise to budget for 50–70% of the approved amount and put the rest into savings, retirement, and life.

How to use this calculator

  • Enter your gross monthly income — pre-tax, including bonuses you can reliably count on.
  • Enter all minimum monthly debt payments — credit cards, auto, student loans.
  • Adjust the DTI segmented control: 28% is conservative, 36% is standard, 43% is the lender ceiling.
  • Review the Plain English insights — especially the watch-outs about home-price-to-income ratio.

Frequently asked questions

Should I use gross or net income?
Use gross (pre-tax) income — that's what lenders use when computing DTI. Just remember the budget produced is before income tax, so your actual cash-in-hand for the mortgage payment may feel tighter than the calculation suggests.
Does the calculator include closing costs?
No — closing costs (typically 2–5% of the home price) are an upfront expense, not a monthly one. Budget for them separately on top of your down payment.
What if I have a partner with income too?
Add both incomes together and both debt loads together. Lenders look at combined household DTI when both borrowers are on the loan.
Why does the answer change so much when I adjust the down payment?
A larger down payment lowers your loan size (less interest paid monthly), removes PMI when ≥20%, and reduces the home you need to insure. All three effects compound — moving from 10% to 20% down typically raises affordability by $30k–$70k.

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