House Affordability Calculator
Two modes: enter income and monthly debts to find maximum home price (28/36 DTI rules), or enter a target monthly payment to find the maximum home price. Includes property tax, insurance, and PMI.
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How It Works
Enter gross annual income, monthly other debts (car, student loans, credit cards), down payment, interest rate, property tax rate, and insurance rate. The calculator applies both the 28% front-end and 36% back-end DTI limits and uses whichever is more restrictive to solve for the maximum home price. Results show both limits so you can see exactly which constraint is binding.
Binding limit = min(income × 0.28, income × 0.36 − other_debts)$100k income, $500/mo debts, 6.5%, 20% down → max home ≈ $340,000Switch to budget mode and enter your comfortable total monthly payment (PITI). The calculator strips out estimated property tax, insurance, and PMI to find the net P&I, then solves the amortization formula backward for the loan size, and adds your down payment to get the home price. Use this when you know your monthly budget limit.
Solve: P&I = budget − tax − insurance − PMI, then find loan from P&I$2,000 total monthly budget, 6.5%, 20% down → home price ≈ $300,000At $8,333/month gross income: front-end allows $2,333/month for housing. If you have $800/month in other debts, back-end allows $3,000 − $800 = $2,200 for housing — more restrictive. With $1,200/month in other debts, back-end allows only $1,800 — clearly the binding constraint. The calculator automatically identifies and applies the binding limit.
Binding = min(income × 0.28, income × 0.36 − monthly_other_debts)$10k/mo income, $1,200 debts: front-end $2,800, back-end $1,800 → back bindsOn a $350,000 home with 1.2% property tax and 0.6% insurance: monthly tax = $350, monthly insurance = $175, total = $525 per month. If your total budget is $2,000, only $1,475 remains for P&I — enough for a $233,000 loan, not $316,000. Always enter realistic local property tax rates — they vary from 0.3% to over 2.5% nationally.
P&I = PITI − property_tax/12 − insurance/12 − PMI − HOA$350k home: tax + insurance add $525/mo, reducing max loan by $83,000The 28% gross income rule often equals 35-40% of after-tax take-home pay, which is very tight. Test: can you handle a $15,000 roof replacement in year two? What if one income drops 20%? Budget 1-2% of home value annually for maintenance. Most financial advisors recommend 20-25% of net take-home for housing — the gross income rule alone sets a ceiling that leaves little margin.
Conservative target: 20-25% of net take-home, not 28% of gross28% of $8,333 gross = $2,333 | if take-home $6,500: that is 35.9% of netQuick Reference
Verify these in the calculator above.
Income mode
$100k income, 6.5%, 20% down
Max home ≈ $370,000
28% rule
28% of $100k annual gross
$2,333/mo housing max
Debt effect
$600/mo other debts impact
Reduces max home ~$80k
Budget mode
$2,000 budget, 6.5%, 20%
Max home ≈ $300,000
Hidden costs
Property tax + ins on $350k
≈ $525/mo extra
HOA impact
$400/mo HOA reduces loan by
≈ $55,000
Safe rule
Conservative housing target
20-25% of net take-home
FHA
FHA back-end DTI limit
43% (vs 36% conventional)
Tips & Shortcuts
Use your county's actual property tax rate — it varies from 0.3% to over 2.5% nationally and can swing your maximum home price by $50,000 or more.
Get a lender pre-approval before shopping. It uses your real credit score and verified income, giving you a more accurate and reliable number than any calculator can.
Every $100/month in debt payments reduces your maximum home price by $12,000-$15,000. Strategically paying off a car loan before buying can unlock significantly more home.
HOA fees are part of your housing cost and reduce how much you can borrow. A $400/month HOA reduces your maximum mortgage loan by roughly $55,000 at current rates.
FHA loans have higher DTI limits (31/43) than conventional (28/36). If conventional financing does not qualify you, FHA may open up more home price options.
Common Mistakes
Using gross income without checking take-home pay
The 28% gross income rule for housing often equals 35-40% of actual take-home pay. At that level, the budget is very tight — especially after childcare, retirement contributions, and discretionary spending. Always test affordability against your after-tax income.
Ignoring property taxes and insurance in the calculation
On a $350,000 home, property tax and insurance add roughly $525/month to the payment. Many buyers calculate affordability using only the P&I payment and are surprised by the full PITI. Always include these costs — they significantly reduce how much you can borrow.
Not accounting for HOA fees
HOA fees are a fixed monthly housing expense that reduce your mortgage borrowing power. A $400/month HOA in a condo or planned community reduces the mortgage you can qualify for by roughly $55,000 at 6.5%.
Buying at the maximum DTI limit
Qualifying for the maximum does not mean you should borrow the maximum. Lenders use gross income, but you live on after-tax take-home. Buying at the ceiling leaves no financial resilience for job changes, medical events, or major home repairs.
Forgetting maintenance costs
Budget 1-2% of home value annually for maintenance and repairs: $400,000 home = $4,000-$8,000 per year. This $333-$667/month is an additional housing cost that the DTI calculation does not account for but dramatically affects real-world affordability.
Frequently Asked Questions
28/36 rule: housing costs ≤ 28% of gross monthly income, total debt ≤ 36%. At $100k income ($8,333/mo): max housing = $2,333. With $500/mo other debts, back-end allows only $2,000/mo housing. At 6.5%, 30yr, 20% down: max home ≈ $340,000.
Front-end DTI: housing expenses (PITI) ≤ 28% of gross monthly income. Back-end DTI: all monthly debt ≤ 36% of gross income. Lenders apply whichever is more restrictive. FHA allows 31/43.
Principal and Interest (mortgage payment), Property Tax (monthly escrow, typically 1-1.5% of value/yr), and Insurance (homeowner's insurance, typically 0.5-1%/yr). PMI added if down payment is below 20%, HOA if applicable.
Every $100/month in debt reduces max home price by roughly $12,000-$15,000. A $600/month car payment reduces buying power by $72,000-$90,000. Paying off a car loan before buying can dramatically increase affordability.
No. 28% of gross often equals 35-40% of take-home — very tight. Target 20-25% of net take-home for housing. Maximum affordability leaves no buffer for repairs, income drops, or savings goals.
Larger down payment = smaller loan = lower P&I = higher max home price within the same budget. At $100k income, 6.5%: 10% down → max $340k, 20% down → max $370k. 20% also eliminates PMI.
Conventional: 620+ minimum, 740+ for best rates. FHA: 580+ (3.5% down). VA/USDA: most lenders require 580+. On $350k loan: 760+ vs 640 credit = roughly $300-350/month difference in payment.
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