🏠 House Affordability Calculator

What is this tool?

Our House Affordability Calculator helps you determine how much home you can afford based on your annual income, monthly debts, down payment, and loan terms. It uses standard lending guidelines to estimate a realistic home buying budget so you can shop with confidence.

How it works

The calculator applies the 28/36 rule: your monthly housing costs should not exceed 28% of gross monthly income (front-end ratio), and total debt payments should stay under 36% (back-end ratio). It takes the lower of these two limits and reverse-calculates the maximum loan amount using the standard amortization formula, then adds your down payment to determine the maximum home price.

How to use

1. Enter your total annual pre-tax income.
2. Set the down payment percentage you plan to make.
3. Enter the expected interest rate and loan term.
4. Add your total monthly debt payments (car loans, credit cards, student loans).
5. Click Calculate to see your maximum affordable home price, down payment, and monthly payment.

Reference Table

Frequently Asked Questions

What is the 28/36 rule?

Lenders typically prefer that housing costs stay under 28% of gross monthly income and total debt under 36%. Some loan programs allow higher ratios.

Does my credit score affect affordability?

Yes. A higher credit score qualifies you for lower interest rates, which increases your buying power. Check your credit before house hunting.

Should I include property taxes and insurance?

Yes. The calculator estimates a base monthly payment. Actual affordability may be lower once property taxes, homeowners insurance, and HOA fees are added.

Tips & Advice

Save at least 20% down to avoid private mortgage insurance (PMI). Get pre-approved before house hunting to know your exact budget. Factor in closing costs (2-5% of home price) and maintenance costs (1% of home value annually).