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Mortgage Affordability Calculator

Estimate the maximum home price that fits your budget, based on your gross income, existing debts, and down payment — using the same front-end/back-end guidelines many lenders reference.

Calculator

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Car loans, student loans, credit cards, etc. — not including the new mortgage
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U.S. average is roughly 1.1% — check your local rate for accuracy
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How It Works

This calculator finds the highest home price where your total estimated monthly housing payment (principal, interest, property tax, insurance, and HOA) stays within the lower of two commonly used lending guidelines: 28% of your gross monthly income for housing alone (front-end), or 36% of your gross income for housing plus all other debts combined (back-end).

Because property tax scales with home price, the calculator solves the budget equation algebraically rather than guessing — the monthly principal-and-interest payment and the monthly property tax are both proportional to home price for a fixed rate and term, so there's one exact price where your total payment matches your available budget.

Not included: This is a budgeting guideline, not a mortgage pre-approval. It doesn't account for your credit score, employment history, cash reserves, PMI, or a specific lender's overlays — all of which affect real approval decisions.

Formula

Price = (Budget + DownPayment × k − Insurance − HOA) ÷ (k + TaxRate ÷ 1200)
  • Budget — The lower of 28% of gross income, or 36% of income minus other debts
  • k — The principal-and-interest payment per dollar borrowed, for your rate and term
  • TaxRate — Annual property tax rate as a percentage of home value

Example

Example inputs: $8,000/mo gross income, $400/mo other debts, $40,000 down payment, 6.5% rate, 30-year term, 1.1% property tax, $1,500/yr insurance.

Result: Maximum home price: $327,167.85. Estimated monthly payment (PITI): $2,240.00 — set by the 28% front-end guideline.

Frequently Asked Questions

Why does my result use 28%/36% instead of a higher limit?

28%/36% is a conservative, widely used conventional-lending guideline. Some loan programs allow back-end DTI up to 43% or higher, which could mean a higher approved amount — but a higher DTI also leaves less monthly breathing room.

Does this include PMI?

No. If your down payment is below 20%, many conventional loans require private mortgage insurance, which would reduce the price you can actually afford at this budget. Try the Down Payment Calculator to see the 20% threshold for your target price.

Is this the same as pre-approval?

No. Pre-approval involves your credit score, verified income and assets, and a specific lender's underwriting rules. This tool only applies a general budgeting guideline to the numbers you enter.

This calculator provides estimates for informational purposes only and should not be considered financial, tax, or legal advice.