Home Affordability Calculator

Calculate the maximum home price you can afford based on your income, debts, and down payment using the 28/36 rule.

Your Information

$
$
20%
350
6.50%
310

Additional Costs

1.20%
0.13
$
$

Maximum Home Price

$368,743

The highest priced home you can afford

Maximum Loan Amount

$294,994

The mortgage amount you qualify for

Down Payment Needed

$73,749

20% of home price

Monthly Payment Breakdown

Principal & Interest$1,865
Property Tax$369
Home Insurance$100
Total Monthly Payment$2,333

Debt-to-Income Ratios

Front-End DTI (Housing only)28.0%
Back-End DTI (All debts)34.0%

Lenders prefer front-end ≤28% and back-end ≤36%. You may qualify with higher ratios with strong credit and compensating factors.

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Understanding Home Affordability

The 28/36 rule is a widely-used guideline that helps determine how much you can afford to spend on housing. According to this rule:

  • 28% Rule (Front-End DTI): Your total housing costs (mortgage, property tax, insurance, HOA) shouldn't exceed 28% of your gross monthly income.
  • 36% Rule (Back-End DTI): Your total debt payments (housing costs plus all other debts) shouldn't exceed 36% of your gross monthly income.

What Factors Affect Affordability?

Several factors determine how much home you can afford:

  • Income: Higher income allows for higher monthly payments and more expensive homes.
  • Existing Debts: Car loans, student loans, and credit card payments reduce how much you can borrow.
  • Down Payment: Larger down payments reduce your loan amount and may eliminate PMI.
  • Interest Rate: Lower rates mean lower monthly payments and higher affordability.
  • Property Taxes: Vary significantly by location and reduce your purchasing power.
  • Credit Score: Better credit scores typically qualify for lower interest rates.

Tips to Increase Home Affordability

  • Pay down high-interest debt before applying for a mortgage
  • Save for a larger down payment (20% eliminates PMI)
  • Shop around for the best mortgage rates
  • Improve your credit score before applying
  • Consider homes in areas with lower property tax rates
  • Increase your income through raises, side work, or adding a co-borrower