Home Affordability Calculator

Home affordability is the question of how large a mortgage — and therefore home price — your finances can comfortably support. Lenders don't simply lend you as much as possible; they assess your ability to repay using debt-to-income (DTI) ratios, and understanding these helps you set a sensible budget before you ever apply.

The most widely used guideline is the 28/36 rule. The front-end ratio says your monthly housing costs — principal, interest, property taxes and insurance — should not exceed 28% of your gross monthly income. The back-end ratio says your total monthly debt payments, including the mortgage plus car loans, student loans and credit card minimums, should stay under 36%. Lenders may allow higher ratios in some programs, but staying within 28/36 is a strong sign a home will be genuinely affordable rather than a financial strain.

Several factors shape your number. Higher income raises your limit; existing debts lower it, because they eat into the 36% cap. A larger down payment lets you afford a higher-priced home for the same monthly payment and may eliminate PMI. The interest rate matters enormously — even a one-point change can shift your maximum price by tens of thousands of dollars, since a higher rate means more of every payment goes to interest rather than the home.

It's important to separate what you *can* borrow from what you *should* borrow. Lenders qualify you on gross income, but you live on take-home pay, and a mortgage is only one of many costs of ownership. Maintenance, utilities, repairs, HOA fees and furnishing all add up, and an affordable payment leaves room for saving and emergencies. Many financially comfortable buyers deliberately borrow below their maximum.

Use this calculator as a starting point to bracket your search, then refine it with the full mortgage calculator and a conversation with a lender, who will factor in your credit score, exact taxes and insurance, and current rates.