Home Affordability Calculator

Find out how much house you can afford based on your finances.

Free Tool
Disclaimer: This calculator provides estimates for educational purposes only. Actual affordability depends on your credit score, debt-to-income ratio, local market conditions, and lender requirements. This is not a loan pre-approval. Consult a mortgage professional for personalized advice.
💰 Your Income
$
Combined gross income before taxes
💳 Monthly Debts
$
Car loans, student loans, credit cards, etc.
🏠 Home Purchase
20%
20% avoids PMI; FHA allows 3.5%
6.5%
📋 Additional Costs
1.2%
Annual rate (US avg: 1.1%)
$
$
You Can Afford Up To
$425,000
Based on a 36% debt-to-income ratio
Down Payment
$85,000
Loan Amount
$340,000
Monthly Payment
$2,500
Max Monthly (at 36% DTI)
$2,500
Monthly Payment Breakdown
Principal & Interest $2,149
Property Tax $425
Home Insurance $150
Total Monthly $2,724
Debt-to-Income Ratio 30%
0% 28% (Ideal) 36% (Max) 43% (FHA) 50%
📊 Payment Breakdown

📚 How We Calculate Affordability

Lenders use debt-to-income (DTI) ratios to determine how much you can borrow:

28% Front-End DTI

Housing costs (mortgage, taxes, insurance) should be ≤28% of gross monthly income.

36% Back-End DTI

All debt payments (housing + other debts) should be ≤36% of gross monthly income.

43% FHA Maximum

FHA loans allow up to 43% DTI, but this is the upper limit for most programs.

Our calculator uses 36% DTI as the default—this is the "sweet spot" that most lenders consider responsible while still giving you meaningful buying power. You can qualify for more at higher DTIs, but a lower ratio means more financial breathing room.

💡 Tips for Home Buyers

🎯 Put 20% Down If Possible

This avoids PMI ($100-300/month), gets better rates, and gives you instant equity. But don't drain your emergency fund to do it.

📉 Shop for the Best Rate

A 0.5% rate difference on a $400K loan = $40,000+ over 30 years. Get quotes from at least 3 lenders.

💰 Budget for Closing Costs

Expect 2-5% of the home price in closing costs. On a $400K home, that's $8,000-$20,000 you'll need at closing.

🏠 Buy Less Than You Qualify For

Just because you can afford $500K doesn't mean you should. A lower payment means more money for savings, travel, and life.