Lenders rarely ask what home you want. They ask what share of your income a mortgage payment would take. This house affordability calculator starts from that same question and works backward to a price.
Enter your household income, saved down payment, monthly debts, and interest rate. The tool shows the highest home price, the largest loan, and the monthly payment that fit the 28/36 rule. It suits first-time buyers and anyone asking how much mortgage they can afford.
Table of Contents
- What the Affordability Calculator Shows
- How to Use It Step by Step
- How the 28/36 Rule Sets Your Budget
- Worked Example: A $95,000 Household
- How to Read Each Result
- What Raises or Lowers Your Price Range
- Limitations and Assumptions
- FAQs About the House Affordability Calculator
What the Affordability Calculator Shows
Results update as you type, with no button to press. You get five numbers, all rounded to whole dollars.
- Maximum Affordability Home Price: the largest loan the payment supports, plus your down payment.
- Max Mortgage Principal and Interest: the monthly loan payment the rule allows.
- Maximum Mortgage Loan Amount: the loan that this payment repays over 30 years.
- Front-End DTI Limit (28%): 28% of your gross monthly income.
- Back-End DTI Limit (36% Minus Debts): 36% of your gross monthly income minus your monthly debts, never below zero.
A copy button saves a short text summary to your clipboard. A reset button restores the sample values of $120,000 income, $60,000 down, $500 debts, and 6.5%.
How to Use It Step by Step
- Type your Annual Household Income ($). Use gross pay before taxes for everyone on the loan.
- Enter your Saved Down Payment ($). Count only cash set aside for the purchase itself.
- Add your Monthly Existing Debts ($). Include car loans, student loans, card minimums, and child support.
- Set the Interest Rate (%) from a current lender quote, such as 6.75.
- Read the results below the inputs, then press the copy button to save them.
Leave rent and utilities out of the debt field. The new mortgage replaces your rent, and lenders do not count utilities as debt.
How the 28/36 Rule Sets Your Budget
The tool divides yearly income by 12 to get gross monthly income. It then finds two payment caps and keeps the lower one.
- Front-end cap: gross monthly income times 0.28.
- Back-end cap: gross monthly income times 0.36, minus your monthly debts.
- Max payment (M): the smaller cap, never below zero.
Next it converts that payment into a loan with the standard 30-year formula.
Max Loan = M × ((1 + r)^n - 1) ÷ (r × (1 + r)^n).
Here r is the yearly rate divided by 100, then by 12. The term n is always 360 months. Finally, it adds your down payment to the loan to get the home price.
Lower of 28% Cap or 36% Cap Minus Debts→Max Loan (30 Years)+Down Payment=Max Home Price
One handy shortcut follows from this math. The 36% cap wins only when your debts top 8% of gross monthly income.
Worked Example: A $95,000 Household
A couple in Ohio earns $95,000 a year and has saved $40,000. They pay $650 a month toward a car loan and student loans. Their lender quotes 6.75% on a 30-year fixed loan.
| Step | Value |
|---|
| Gross monthly income | $7,916.67 |
| Front-end cap (28%) | $2,216.67 |
| Back-end cap (36% minus $650) | $2,850.00 - $650 = $2,200.00 |
| Max payment (lower cap) | $2,200 |
| Maximum loan amount | $339,193 |
| Maximum home price | $379,193 |
The back-end cap wins here because $650 is above 8% of their income. If they cut debts to $300, the 28% cap takes over. Their payment rises to $2,217 and the price climbs to $381,763.
Their $40,000 covers about 10.5% of the $379,193 price. That is below 20%, so most lenders would add private mortgage insurance.
How to Read Each Result
- Home price: a ceiling, not a target. Shopping a bit below it leaves room for repairs and savings.
- Principal and interest: the loan payment only. Taxes, insurance, PMI, and HOA dues come on top.
- Loan amount: the most you could borrow at this rate over 30 years.
- Front-end limit: the 28% figure. When debts are low, your payment equals this number.
- Back-end limit: the 36% figure after your debts come out. In the example, this card reads $2,200.
The smaller of the two limit cards always equals your payment. If the back-end card is smaller, debts are limiting your budget.
What Raises or Lowers Your Price Range
Rates move the price more than most buyers expect. In the example, 5.75% allows a $416,988 home. At 7.75%, the same budget supports only $347,086.
Debt payoff can also help, but only while the back-end cap is the one that binds. A plan from the debt payoff calculator shows how soon a car loan could be gone.
Your real housing bill includes escrow costs the tool leaves out. Estimate them with the property tax calculator, then subtract them from the max payment. If taxes and insurance run $550 a month, the loan payment drops to $1,650. With $40,000 down, that supports about a $294,395 home.
Cash matters too. The down payment savings tool shows how big your deposit should be. Set aside money for the closing costs on a home purchase as well. Then check the final loan in the monthly mortgage payment calculator.
Limitations and Assumptions
- The loan term is fixed at 30 years. There is no option for 15-year or 20-year loans.
- The payment covers principal and interest only. The 28/36 rule used by lenders usually includes taxes and insurance.
- It does not check credit score, cash reserves, PMI, or closing costs.
- The rate cannot go below 0.1%. A blank or zero rate is treated as 0.1%.
- If debts use up the whole 36% cap, the loan shows $0. The price then equals your down payment alone.
- FHA, VA, and many conventional programs allow higher ratios than 28/36. This tool does not model them.
FAQs About the House Affordability Calculator
How Much House Can I Afford on a $100,000 Salary?
With no debts and a 6.75% rate, the max payment is $2,333. That supports a loan of about $359,750, plus your down payment.
Is This a Home Affordability or a Mortgage Affordability Tool?
It is both. The loan amount answers the mortgage question, and the home price adds your down payment.
Which Debts Should I Enter?
Enter minimum payments on recurring debts that show on your credit report. Leave out rent, utilities, phone bills, and groceries.
Why Is My Payment Lower Than 28% of My Income?
Your debts are above 8% of gross monthly income. The back-end cap is then lower than the front-end cap, so it sets the payment.
Does the Result Include Property Tax and Insurance?
No. The payment is principal and interest only. Subtract your expected escrow costs to get a safer loan figure.
Should I Buy at My Maximum Price?
Many buyers stay below it to keep savings strong. Compare monthly costs with the rent versus buy calculator before you decide.
For more home, loan, and savings planners, browse the finance and business tools hub.
This calculator gives planning estimates only and is not financial advice. Reviewed for general accuracy by Prof. Dr. Khalil Mudassar, PhD.