Home Affordability Calculator

Home affordability is governed by lender guidelines that cap your total monthly housing payment at a percentage of your gross monthly income. The most common rule is the 28/36 rule: housing should be no more than 28% of income, and total debt payments (housing plus other debts) should be no more than 36%.

This calculator uses the 36% total-debt-to-income (DTI) ceiling and works backwards to find the maximum home price that keeps you within budget. It accounts for principal, interest, property taxes, and HOA fees. The "max payment" shown is your full housing budget; the "max price" assumes a standard 30-year fixed-rate loan at your chosen rate.

The DTI tier colors give a quick read on your situation. Below 36% is healthy for most lenders. 36–43% is acceptable but tight. Above 43% will likely make qualifying for a conforming mortgage difficult — you'll either need to lower your purchase price, pay off debts, or increase your down payment.

Remember: the maximum home you qualify for is rarely the same as the home you should buy. Lenders ignore retirement savings, childcare, healthcare and lifestyle costs. Many advisors suggest spending no more than 25–28% of income on housing to leave room for everything else.

The 28/36 rule is the traditional benchmark for home affordability: spend no more than 28% of gross monthly income on housing (PITI — principal, interest, taxes, insurance) and no more than 36% on total debt service including the mortgage. Modern lenders sometimes approve borrowers above these ratios, especially for jumbo loans or high earners, but stretching beyond them is rarely a comfortable place to live. This calculator uses the rule as its anchor; treat the result as a ceiling, not a target.

Lenders use front-end and back-end debt-to-income (DTI) ratios when approving mortgages. Front-end DTI measures housing costs alone; back-end DTI adds car loans, student loans, credit-card minimums and other debt. Federally backed loans (FHA, VA, USDA) often allow back-end DTI up to 50% with compensating factors. Conventional loans generally cap at 43–45%. If your DTI is borderline, paying down a credit card or two can move you into a better loan tier.

Down payment size dramatically changes affordability. Putting down 20% avoids private mortgage insurance (PMI), which adds 0.3–1.5% per year to your loan cost. FHA loans allow as little as 3.5% down but require mortgage insurance premiums (MIP) for at least 11 years. VA and USDA loans permit zero down for eligible borrowers. Run this calculator with several down-payment scenarios to see how each affects your monthly payment and total interest over the life of the loan.

Property taxes and insurance vary enormously by location and can shift your affordability picture overnight. Property tax rates range from under 0.3% in Hawaii to over 2% in New Jersey and parts of Illinois. Homeowners insurance is rising fastest in coastal and wildfire-prone areas, with some Florida and California ZIP codes seeing premiums above $5,000 per year. Always pull a quote for the specific neighborhood you are considering rather than relying on national averages.