Wondering how much house you can actually afford? The Mortgage Affordability Calculator helps you find a realistic home price based on your income, monthly debts, down payment, and current interest rates. Rather than guessing or relying on vague rules of thumb, this tool runs the real numbers so you can shop for a home with confidence.
Most financial experts recommend keeping your total housing costs — including principal, interest, taxes, and insurance — below 28% of your gross monthly income. At the same time, your total debt payments (housing plus car loans, student loans, credit cards, etc.) should stay under 36–43% of your monthly income. This calculator applies both of those guidelines to give you a safe and a stretch estimate.
Whether you are a first-time buyer trying to understand your budget, a growing family looking to upgrade, or someone relocating for work, this tool gives you a quick, honest picture of what the mortgage lender math looks like. Just enter your annual income, monthly debts, the down payment you have saved, and the current interest rate, and the calculator shows your maximum affordable home price along with the estimated monthly payment.
Mortgage Affordability Calculator
How the Mortgage Affordability Calculator Works
The calculator uses two standard debt-to-income (DTI) ratio rules that lenders apply when approving mortgages. The first rule limits your monthly housing payment to 28% of gross monthly income (the “front-end ratio”). The second rule limits all monthly debt payments combined to 36% of gross monthly income (the “back-end ratio”). The lower of the two limits becomes your maximum mortgage payment. The calculator then works backwards from that payment using the standard mortgage formula to find the maximum loan you can afford, and adds your down payment to arrive at the maximum home price.
Example Calculation
Annual income $85,000 → monthly gross income $7,083. At 28%, maximum housing = $1,983/mo. Existing debts $500/mo → at 36%, max total debt = $2,550/mo, leaving $2,050/mo for housing. The 28% rule is more restrictive, so maximum payment = $1,983. At 6.75% for 30 years, the calculator finds a loan of approximately $291,000. With a $50,000 down payment, the affordable home price is roughly $341,000.
Affordability by Income — Quick Reference
| Annual Income | Max Payment (28%) | Est. Home Price (6.75%, 30yr, 10% down) |
|---|---|---|
| $50,000 | $1,167 | ~$190,000 |
| $75,000 | $1,750 | ~$285,000 |
| $100,000 | $2,333 | ~$380,000 |
| $125,000 | $2,917 | ~$475,000 |
| $150,000 | $3,500 | ~$570,000 |
Frequently Asked Questions
What percentage of income should go to a mortgage?
Most financial experts recommend keeping total housing costs at or below 28% of your gross monthly income. This includes principal, interest, property taxes, and homeowner’s insurance. Staying under this threshold leaves room for savings, emergencies, and other financial goals.
Does this calculator include taxes and insurance?
The calculator uses your stated payment ceiling to find the loan amount but does not separately itemize property taxes and insurance. In practice, taxes and insurance can add $200–$600/month to your housing cost, so your actual loan amount may be 10–20% lower than the estimate. Treat the result as a starting point, not a final approval.
What is the debt-to-income ratio lenders use?
Conventional lenders typically require a back-end DTI below 36–43%. FHA loans may allow up to 50% DTI in some cases. A lower DTI means you are less risky to lenders and may qualify for a better interest rate.
How does the down payment affect affordability?
A larger down payment reduces the loan amount, which lowers your monthly payment and total interest paid. It also eliminates or reduces Private Mortgage Insurance (PMI), which is usually required when you put less than 20% down. A 20% down payment often saves hundreds of dollars per month.
Is this the same as a mortgage pre-approval?
No. This calculator gives you a general estimate based on income ratios. A pre-approval from a lender involves a hard credit check, verification of employment, tax returns, and bank statements. Use this tool to set realistic expectations before you start the formal pre-approval process.
What if I have no debts?
If you have zero monthly debt payments, the 36% back-end limit equals the 28% front-end limit in terms of which is more restrictive. Your maximum housing payment will simply be 28% of your gross monthly income, giving you the highest possible loan amount for your income level.