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Home Affordability Calculator

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Work backward from your income to estimate a reasonable home price range, based on a common lending guideline: keeping total debt payments (including the new mortgage) under a target share of your gross income.

Home Affordability Calculator

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Estimated max home price
$477,086
Max monthly housing
$2,350
Max loan amount
$381,669
Principal & interest only — actual approval also depends on property tax, insurance, and credit profile.

How the estimate works

Lenders typically cap your total monthly debt (including the new mortgage) at a percentage of gross income — commonly around 36%, though it can range higher or lower depending on the loan program and lender.

Max housing payment = (Annual income ÷ 12) × Max DTI − Other monthly debts
Example

$95,000/year income, $500/month in other debts, 36% max DTI: max housing payment = (95000÷12)×0.36 − 500 = $2,350/month. At 6.25% over 30 years with 20% down, that supports a loan of about $381,669 — an estimated max home price of about $477,086.

Step-by-step guide

  1. Enter your annual gross (pre-tax) income.
  2. Enter your other monthly debt payments — car loans, student loans, minimum credit card payments, and similar.
  3. Enter a target debt-to-income ratio. 36% is a common guideline, though some programs allow up to around 43–50%.
  4. Enter your expected down payment percentage and interest rate to see an estimated maximum home price.

Common mistakes

Treating the maximum affordable price as a target — many financial planners suggest aiming comfortably below your max, to leave room for property tax, insurance, maintenance, and savings.
Forgetting that this is principal and interest only — actual monthly housing costs are higher once property tax, insurance, and possibly PMI are added.

Frequently asked questions

What DTI ratio should I use?

36% is a widely cited conventional guideline, but exact limits vary by loan program and lender — some allow up to 43-50% for well-qualified borrowers. Check with a lender for your specific situation.

Does this guarantee loan approval?

No — this is an estimate based on income and debt only. Actual approval also depends on credit score, employment history, cash reserves, and the specific lender's underwriting standards.

Should I borrow the maximum I qualify for?

Not necessarily — qualifying for a certain amount doesn't mean it's comfortable for your budget. Many buyers choose a price below their maximum to keep a cushion for savings, emergencies, and lifestyle costs.

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