House Affordability Calculator
Determine how much house you can afford based on your income, debts, and down payment with comprehensive analysis of monthly payments and total costs.
Calculate Now
Get instant, accurate results
Enter Your Information
Fill in your financial information above to see how much house you can afford.
How to Use the House Affordability Calculator
The biggest financial decision most people ever make is buying a house, and understanding how much house you can afford safely is critical for long-term financial stability. The House Affordability Calculator will help you estimate a safe, practical home price based on income, existing debts, down payment, and expected housing costs. This calculator is much more than just a simple income multiple. It takes your monthly obligations, DTI ratios, interest rates, property taxes, insurance, and HOA fees into consideration to give you a realistic idea of what lenders may approve and what you can comfortably manage. Instead of maximum limits, the tool has been developed to encourage responsible home purchase. It's built to help balance affordability against lifestyle needs, future expenses, and financial flexibility. Be it that you are a first-time homebuyer or planning your next move, this calculator provides clear guidance to help you shop with confidence and avoid becoming house-poor.
How to Use
1. Enter Your Annual Household Income
To begin, you'll want to input your total household gross income before taxes are taken out. This amount includes earnings such as salary, bonuses, and other forms of reliable income that you have coming in. Income is the base of affordability calculation. It is used by lenders to calculate how much one can borrow and still have good debt-to-income ratios.
2. Add Monthly Debt Payments
Enter your current debt payments per month, including loans, credit cards, or personal loans. Such liabilities affect how much of your income can be spent on housing expenses and contribute significantly to DTI ratio calculations.
3. Choose Loan Term and Interest Rate
Enter the length you anticipate for your mortgage loan (typically a 30 or 15-year loan) and the rate of interest you anticipate paying on the loan. These will have a direct bearing on your monthly payments for your mortgage and your ability to borrow money.
4. Set Down Payment Percentage
Enter in the percent of home price you plan to pay upfront as a down payment. A higher down payment reduces the loan amount, lowers monthly payments, and possibly saves you from extra costs such as PMI.
5. Include Property Taxes, Insurance, and HOA Fees
Add estimated annual property taxes, homeowners' insurance, and any HOA or co-op fees. These are often hidden ongoing costs that can greatly affect monthly affordability.
6. Select Debt-to-Income (DTI) Guideline
Select a DTI guideline. Many use the common 28/36 rule for conventional loans. This helps the calculator estimate a price range that best suits normal lender requirements while keeping in mind financial safety.
7. Calculate and Review Results
After filling in all the inputs, calculate your results to see an estimated home price that is affordable, along with monthly breakdowns of those payments. This allows you to change your assumptions and play with the various 'what-ifs' before you put your money into buying.
Key Formulas Used
DTI measures how much of your income goes toward debt payments. Lenders use this ratio to assess borrowing risk and affordability.
This guideline limits housing costs (mortgage, taxes, insurance) to a safe portion of income for conventional loans.
Where: P = loan principal r = monthly interest rate n = total number of payments This formula estimates monthly mortgage payments based on loan terms.
Benefits
- Provides a realistic home affordability estimate
- Accounts for income, debts, and housing costs
- Uses lender-style DTI guidelines
- Helps prevent overextending your budget
- Supports smarter home buying decisions
- Encourages long-term financial stability
- Easy to adjust assumptions and compare scenarios
When & Where to Use
- First-time homebuyer planning
- Estimating a safe home price range
- Comparing affordability at different interest rates
- Understanding lender approval criteria
- Budgeting for future home purchases
- Evaluating the impact of down payments
- Financial planning before house hunting
Who Should Use This Calculator
The House Affordability Calculator is a tool for anyone planning to purchase a house. First-time buyers can utilize it in determining price affordability prior to initiating their search process, whereas others can assess affordability when choosing to upgrade or relocate. This calculator can be used by financial planners, real estate agents, as well as couples looking to buy jointly. If you are looking to get clarity on things before approaching the lenders or the agents, this calculator should serve as an extremely helpful tool.
Related Calculators
What is this?
A house affordability calculator determines the maximum home price you can afford based on your income, debts, down payment, and lending criteria. It considers all monthly housing costs including principal, interest, taxes, insurance, PMI, and HOA fees to give you a realistic budget for home shopping.
How it works
The calculator uses your gross monthly income and debt-to-income ratio limits to determine your maximum monthly housing payment. It then works backwards, considering interest rates, loan terms, property taxes, insurance, and other costs to calculate the maximum home price you can afford while staying within safe lending guidelines.
Pro Tips
- Use conservative debt-to-income ratios (28% or lower) for financial safety
- Remember to budget for moving costs, repairs, and furnishing
- Consider future income changes and job stability
- Factor in utilities, maintenance, and unexpected home expenses
- Get pre-approved to understand your actual borrowing capacity
Frequently Asked Questions
What does a house affordability calculator do?
A house affordability calculator estimates the maximum home price you can afford based on your income, debts, interest rate, loan term, and lending guidelines.
What costs are included in the monthly payment?
The calculator includes principal and interest, property taxes, home insurance, HOA fees, and PMI (if applicable). Maintenance costs are shown separately and are not included in DTI calculations.
What is DTI and why does it matter?
DTI (Debt-to-Income ratio) measures how much of your gross income goes toward debt payments. Lenders use it to assess borrowing risk and determine loan eligibility.
What DTI rules are used in this calculator?
The calculator supports common lending guidelines: Conventional (28/36), FHA (31/43), VA (41%), and USDA (29/41).
Does this calculator include PMI?
Yes. PMI is automatically included for Conventional, FHA, and USDA loans when the loan-to-value ratio exceeds 80%. VA loans do not include PMI.
Are maintenance costs included in affordability?
Maintenance costs are estimated and shown separately, but they are not included in lender DTI limits. You should still budget for them when planning home ownership.
How accurate are the results?
The results are estimates based on standard lending rules and assumptions. Actual affordability depends on credit score, lender policies, taxes, insurance rates, and local market conditions.
Does this replace mortgage pre-approval?
No. This calculator helps with planning only. A lender pre-approval is required to determine your true borrowing capacity.
Can interest rates change my affordability?
Yes. Even small changes in interest rates can significantly impact how much home you can afford, which is shown in the interest-rate sensitivity chart.