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Home Affordability Calculator

Enter your income, debts, down payment, and loan terms to estimate the highest home price that fits standard affordability rules.

Annual gross income ($) Existing monthly debts ($, e.g. car loan, student loan, credit cards) Down payment ($) Mortgage interest rate (% per year) Loan term (years) Monthly property tax + insurance estimate ($)

Enter your numbers and press Calculate.

How to use

Enter your gross annual income before taxes, not take-home pay.
Add all recurring monthly debt payments, such as car, student, and minimum credit card payments.
Enter the down payment you actually have saved, plus your expected rate, term, and monthly tax and insurance estimate.
Press Calculate and compare the maximum price with homes in your price range.

How affordability is judged

Lenders commonly use two debt-to-income rules. The front-end rule says housing costs should stay at or below 28% of gross monthly income. The back-end rule says all debts combined, including the new housing payment, should stay at or below 36% of gross monthly income. This calculator takes the lower of the two limits, because the stricter rule is the one that protects your budget.

From that monthly housing limit, the calculator subtracts your tax and insurance estimate, leaving the amount available for the mortgage payment itself. It then works backward through the loan formula to find the largest loan that payment can support, and adds your down payment to reach the maximum home price. A longer term or a lower rate raises the affordable price, while higher debts or higher taxes lower it. A price that passes these rules is affordable on paper, but you should still leave room for maintenance, utilities, and savings.

Worked example: Annual income $96,000 gives gross monthly income of $8,000. The 28% rule allows $2,240 for housing; the 36% rule with $400 of existing debts allows $2,480, so the calculator uses $2,240. After a $400 monthly tax and insurance estimate, $1,840 remains for the mortgage. At an example rate of 6.5% over 30 years, that supports a loan of about $291,108. With a $60,000 down payment, the maximum affordable home price is about $351,108, with an estimated monthly payment of $2,240 ($1,840 mortgage + $400 tax and insurance).

Disclaimer: Results are estimates for education only, not financial or real estate advice. Rates, taxes, and fees vary by lender and location. Verify with a qualified professional before making a purchase decision.

Frequently Asked Questions

What is the 28/36 rule?

It is a common lender guideline: housing costs at or below 28% of gross monthly income, and all debts including housing at or below 36%. Some loan programs allow higher ratios, but staying near these limits leaves more room for other expenses.

Does this calculator guarantee I can borrow this amount?

No. A lender also reviews credit history, employment, verified income, assets, and the specific loan program. This result is a planning estimate, not a pre-approval.

Should I buy at the maximum affordable price?

Not necessarily. The maximum leaves little slack for repairs, job changes, or rising costs. Many buyers choose a price below the maximum so the monthly payment still leaves room to save.

Why do taxes and insurance matter so much?

They are part of the monthly housing payment and are often collected with the mortgage payment. In high-tax areas they can add hundreds of dollars a month and sharply reduce the loan you can support.