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House Affordability Calculator

Calculate how much house you can afford based on income, debts, and down payment. Plan your home purchase wisely.
Decision Context
Page-specific guidance for using this result in a real planning decision.

This calculator helps turn income, debts, down payment, and rate assumptions into a realistic home-price range instead of a guess based on listing prices.

Use it before home shopping so your search range is grounded in payment capacity and lender-style affordability logic.

The output is most useful when treated as a ceiling, not a target, because maintenance, closing costs, moving expenses, and lifestyle goals still need room in the budget.

Methodology, assumptions, and limitations

The estimate compares projected housing obligations and existing debts with gross income using the entered debt-to-income limits. Available down payment and estimated mortgage terms then constrain the purchase-price range.

Assumptions
  • Income and recurring debts are entered consistently.
  • The estimated interest rate applies to the modeled loan.
  • Taxes, insurance, and association costs reflect the intended location.
Limitations
  • Lenders use different underwriting standards and credit information.
  • Maintenance, closing, and moving costs are outside many affordability ratios.
  • The maximum estimated price should not be treated as a recommended budget.

Sources and standards

Related calculators

Mortgage CalculatorLoan Calculator
Calculator
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Analysis
Interpretation of the current calculator output

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How to Use

Step-by-step instructions
  1. 1Enter your annual gross income
  2. 2Input your total monthly debts (car loans, credit cards, etc.)
  3. 3Set your down payment percentage (typically 20%)
  4. 4Add current mortgage interest rate
  5. 5Specify loan term (typically 30 years)
  6. 6Review maximum affordable house price

House Affordability Formula

Uses the 28/36 rule: housing costs shouldn't exceed 28% of gross income, and total debt shouldn't exceed 36%.
Max Monthly Payment = min(Income × 28%, Income × 36% - Debts) Max House Price = Loan Amount ÷ (1 - Down Payment %)

Variables:

28% RuleMax housing payment as % of gross income
36% RuleMax total debt payments as % of gross income
Loan AmountCalculated from max monthly payment
Down PaymentUpfront payment as % of house price

Example

Home Buyer Example

Inputs:

Gross Income:$80,000/year
Monthly Debts:$500
Down Payment:20%
Interest Rate:6.5%
Loan Term:30 years

Steps:

  1. 1.Max housing payment = $80,000 × 28% ÷ 12 = $1,867
  2. 2.Max total debt = $80,000 × 36% ÷ 12 = $2,400
  3. 3.After debts: $2,400 - $500 = $1,900 (take minimum)
  4. 4.Affordable loan at 6.5%/30yr = ~$298,000
  5. 5.With 20% down: $298,000 ÷ 0.8 = $372,500 house
Result:
Can afford ~$372,500 house with $74,500 down payment

Frequently Asked Questions

What is the 28/36 rule?

28%: Housing costs (mortgage, taxes, insurance) should not exceed 28% of gross monthly income. 36%: Total debt payments (housing + other debts) should not exceed 36% of gross income.

How much down payment should I make?

20% avoids PMI (private mortgage insurance). Less is possible but costs more monthly. More reduces loan amount and interest. FHA loans allow as low as 3.5%.

What other costs should I budget for?

Beyond mortgage: property taxes (1-2% of home value annually), homeowners insurance ($1,000-3,000/year), HOA fees, maintenance (1% of home value/year), utilities, and closing costs (2-5% of price).
Continue with calculators from the same topic.
Specific Guides
Focused pages for closely related calculation questions.
How Much House Can I Afford With Down Payment

Use income, debt, rate assumptions, and down payment size to estimate a realistic home-price range before you start shopping or request preapproval.