Mortgage Affordability
Find out how much house you can afford based on your income and debts.
How mortgage affordability is calculated
Mortgage affordability is estimated from gross income, existing monthly debt, down payment, interest rate, and loan term. The calculator first finds the largest monthly housing payment that fits inside debt-to-income guidelines, then converts that payment into a maximum loan amount.
This is a planning estimate, not a loan approval. A lender may use different rules depending on credit score, loan type, assets, property taxes, homeowners insurance, HOA dues, and underwriting requirements.
Debt-to-income ratios
Lenders compare monthly obligations with gross monthly income. The front-end ratio looks only at housing costs. The back-end ratio includes housing plus other recurring debt payments.
Front-end DTI = housing payment / gross monthly income
Back-end DTI = (housing payment + other debts) / gross monthly income
Max payment = lower of the front-end and back-end limits| Measure | Limit | Payment impact |
|---|---|---|
| Front-end DTI | 28% | Housing payment only: $1,866.67 |
| Back-end DTI | 36% | Housing plus debts: $1,900 |
| Monthly debts | $500 | Existing obligations: $500 |
The loan payment formula
After the maximum monthly payment is found, the calculator works backward through the standard fixed-rate mortgage formula.
Payment = loan x monthly rate x (1 + monthly rate)^months
/ ((1 + monthly rate)^months - 1)
Maximum price = maximum loan + down paymentWorked example: With $80,000 income, $500 monthly debt, $20,000 down, 6.5% interest, and a 30-year term:
Gross monthly income = $80,000 / 12 = $6,667
Front-end limit = $6,667 x 28% = $1,867
Back-end room = $6,667 x 36% - $500 = $1,900
Max mortgage payment = $1,867What the estimate does not include
This calculator focuses on principal and interest. Real homeownership budgets often include several additional monthly costs that can materially reduce the price range.
Common affordability guidelines
| Guideline | Typical range | What it means |
|---|---|---|
| 28/36 rule | 28% front / 36% back | Traditional conservative benchmark |
| Higher DTI approvals | Up to 43%+ | Possible with strong credit or specific loan programs |
| 20% down payment | No PMI target | Reduces monthly cost and required loan amount |
| Emergency reserve | 3-6 months | Protects against repairs, income changes, and surprises |
Practical home budget tips
- Budget below the maximum. A lender maximum can still feel tight once utilities, repairs, childcare, savings, and lifestyle costs are included.
- Test rate changes. A small interest-rate move can change affordability by tens of thousands of dollars.
- Separate down payment from closing costs. Closing costs often need separate cash and should not drain your emergency fund.
- Include ownership costs. Maintenance, property tax increases, HOA assessments, and insurance renewals can rise over time.
- Get pre-approved before shopping. A pre-approval gives a more realistic range because it uses your credit, documents, and local loan rules.
This calculator estimates affordability with debt-to-income ratios. Front-end DTI = housing payment / gross monthly income Back-end DTI = housing payment + monthly debts / gross monthly income The lower allowed payment is converted into a maximum loan amount, then your down payment is added to estimate a maximum home price.