Home Affordability Calculator
Home affordability is determined by your income, existing debt, and down payment — calculated using the lender's 28/36 rule. Your housing costs (principal, interest, taxes, insurance) must stay below 28% of gross income, and all debts combined must stay below 36%. This calculator applies the same formula mortgage underwriters use to pre-approve buyers in 2026.
How Home Affordability Is Calculated
Mortgage lenders use two ratios — the front-end and back-end ratio — to determine your maximum qualifying home price. These are codified in Freddie Mac and Fannie Mae underwriting guidelines and used by virtually all conventional lenders.
Front-End (Housing) Ratio
PITI ÷ Gross Income ≤ 28%
Back-End (DTI) Ratio
(PITI + All Debts) ÷ Gross Income ≤ 36%
| Term | Definition |
|---|---|
| PITI | Principal + Interest + Property Taxes + Insurance (your total monthly housing cost) |
| DTI | Debt-to-Income ratio — all monthly debt obligations divided by gross monthly income |
| PMI | Private Mortgage Insurance — required when down payment is less than 20% of home value |
Example: On $100,000/year income ($8,333/month), the 28% front-end limit is $2,333/month for all housing costs. After subtracting taxes, insurance, and HOA, the remaining amount covers principal and interest — which determines the maximum loan you qualify for via the standard amortization formula.
⚠️ Expert Pro-Tip
The maximum you qualify for is not the maximum you should spend. Lenders calculate what you can borrow, not what's financially optimal for your life. The conservative rule of thumb used by financial planners is to keep housing costs below 25% of take-home pay (not gross). Use this calculator's "conservative recommendation" (80% of max) as your actual shopping budget, and you'll have room for maintenance, emergencies, and wealth building.
Home Affordability Calculator
Your Financial Profile
Estimated Monthly Costs
Affordability Results
Maximum Home Price
$337,450
Based on the 28/36 lending rule
Conservative Recommendation
$269,960
20% buffer for financial stability
Monthly Payment Breakdown
| Principal & Interest | $1,845.88 |
| Property Tax | $337.45 |
| Insurance + HOA | $150.00 |
| Total Housing Payment | $2,333.33 |
Lender Qualification Ratios
Front-End Ratio
Housing ÷ Gross Income (max 28%)
Back-End Ratio (DTI)
All Debts ÷ Gross Income (max 36–43%)
Down Payment
⚠ PMI required below 20%
Based on your results — what to do next:
Calculate your exact monthly payment
You can afford up to $337,450. Now plug in a specific price to get the exact P&I payment, amortization schedule, and payoff date.
How long to save your down payment?
Need $60,000 for a down payment. See exactly how much to save monthly to hit that target.
See how homeownership builds net worth
A $337,450 home with $60,000 down gives you instant equity. Track how it grows your total net worth.