Mortgage Affordability Calculator
Enter your income, debts, and down payment — get an instant maximum purchase price, estimated monthly payment, and DTI breakdown. No sign-up required.
How the Home Affordability Calculator Works
- Lenders qualify you based on your gross income and debt-to-income (DTI) ratio. Most conventional loans require a back-end DTI below 50%, meaning your total monthly debts — including the new mortgage — stay under half your gross monthly income.
- Your maximum purchase price is calculated by working backward from your allowable monthly PITI (principal, interest, property taxes, and homeowners insurance) after subtracting existing debt payments.
- Down payment percentage directly affects your loan amount and whether PMI applies. Putting less than 20% down on a conventional loan typically adds private mortgage insurance to your monthly payment.
Calculation details
Methodology
The calculator starts with gross monthly income multiplied by the selected back-end DTI limit. It subtracts recurring monthly debts to find the housing-payment budget, then works backward through principal and interest, taxes, insurance, and estimated PMI to solve for a purchase price at the entered rate and down payment.
Assumptions and limitations
- The selected DTI limit is a planning assumption, not a promise that a lender will approve that ratio.
- Income must be stable and documentable, while debt payments should match the obligations a lender will count.
- The estimate does not test credit, reserves, employment history, property eligibility, closing cash, or program-specific underwriting rules.
Worked example: $100,000 annual income
- Gross monthly income: $8,333
- Selected back-end DTI: 45%
- Existing monthly debt: $500
Housing-payment budget: about $3,250 per month
The 45% total-debt ceiling is about $3,750. After subtracting $500 of existing debt, approximately $3,250 remains for principal, interest, taxes, insurance, PMI, and HOA dues. The supported home price changes with those inputs.
Official sources
- Fannie Mae Selling Guide — debt-to-income ratios: Describes conventional DTI calculation and underwriting considerations.
- Consumer Financial Protection Bureau — home affordability: Explains why an affordable personal budget can differ from a lender's maximum approval.
Frequently Asked Questions
How much house can I afford on a $100,000 salary?
A common rule of thumb is 2.5–3× your annual gross income, which puts you in the $250,000–$300,000 range. However, the real number depends on your down payment, existing debts, interest rate, and local property taxes. Use the affordability calculator above with your actual figures for a more precise estimate.
What debt-to-income ratio do I need to qualify for a mortgage?
Most conventional loan programs want your total back-end DTI (all monthly debts including the new mortgage) at or below 45%–50% of gross monthly income. FHA loans allow up to 57% with compensating factors. Front-end DTI (housing costs only) is typically capped at 28%–31%. The lower your DTI, the more loan programs and better rates you qualify for.
Does the affordability calculator include property taxes and insurance?
Yes. The maximum home price calculation accounts for PITI — principal, interest, property taxes, and homeowners insurance. Property tax rates vary significantly by location, so replace the 1.2% starting assumption with a local tax bill or county estimate for a more useful result.
How does my down payment affect how much house I can afford?
A larger down payment reduces your loan amount, lowers your monthly payment, and eliminates PMI once you reach 20% down. It also improves your debt-to-income ratio, potentially qualifying you for a larger purchase price. Even moving from 5% to 10% down can meaningfully increase your maximum home price.
What is the 28/36 rule for home affordability?
The 28/36 rule is a classic guideline: spend no more than 28% of gross monthly income on housing costs (front-end DTI) and no more than 36% on all debts combined (back-end DTI). Modern lenders have loosened these thresholds — many approve loans at higher DTIs — but the 28/36 rule remains a useful starting point for conservative budgeting.
How to use this estimate
This calculator is an educational planning tool. Results are based on the figures and assumptions entered by the reader, use standard mortgage mathematics, and are not a loan offer, approval, or substitute for a lender's Loan Estimate. Taxes, insurance, fees, mortgage insurance, and available rates vary by borrower, property, lender, and location.
Review the assumptions, compare more than one scenario, and confirm the final numbers with a licensed mortgage professional before making a financial commitment.