How much house can I afford?

Estimate a home budget from income or monthly spending

Most mortgage tools answer “what will this house cost me?” This one works backwards. It answers a different question: given your income and debts, or a monthly amount you are willing to spend, what purchase price does that support? There are two tabs. The income tab applies housing and total-debt ratios to your gross income. The monthly-budget tab starts from a fixed amount you choose and solves for the price. Both produce an estimate, never an approval, and both show the loan, the down payment, the monthly cost of owning at that price and the cash needed to buy.

The example uses 120,000 of gross income, no other debt, 20% down, a 6% example rate over 30 years, property tax of 1.5% and insurance of 0.5% of the price each year, and 1.5% a year for maintenance. It estimates a price of 433,231. Change any input and press Calculate to see how the answer moves.

Treat the estimate as a ceiling rather than a target. It shows the highest price at which the entered costs and ratios fit, which is not the same as the price at which life feels comfortable. Many households choose a payment well below the limit to leave room for savings, repairs and changes in income. Because every input is yours, the most valuable way to use the tool is to test a range: a cautious ratio, a middle one and an aggressive one, and compare what each says about price and monthly cost.

How the house affordability calculator works

Income and debt limits

In the income tab, you enter gross household income with its frequency, your required monthly debt payments, and any housing obligation you will keep. The calculator converts income to a monthly figure and applies two ratios you can edit: a front-end ratio for housing and a back-end ratio for housing plus all other debt. The housing amount allowed each month is the smaller of the front-end limit and the back-end limit minus your other debts. The presets are illustrative arithmetic only; they are not loan products and the tool does not model lender approval.

Fixed monthly budget

In the budget tab you type the monthly amount you want housing to cost. A switch decides whether taxes, insurance, HOA fees, PMI and maintenance sit inside that amount or outside it. If they are inside, a larger share of the budget goes to costs and the price is lower; if they are outside, the budget limits principal and interest only, and the extra costs are listed separately so the total is not hidden.

Down payment and cost units

A down payment can be a percentage of the price or a fixed amount, and each yearly cost can be a percentage of the price or a dollar figure. Percentages grow with the price and amounts do not, which changes how the solution behaves: with a percentage down payment and percentage costs, the monthly cost is proportional to the price. The calculator solves this directly rather than by trial and error, so the same inputs in either unit give the same price.

Remember that the ratios apply to gross income, before tax. Two households with the same gross income can have different take-home pay, different retirement contributions and different fixed costs, and the calculator cannot see any of that. If your take-home pay is low relative to gross, or if you have obligations outside the debt field, a lower ratio than the preset may suit you better. The back-end ratio field is the one to lower first because it is the limit that debt and housing share.

What limits your estimated house price?

With the income tab, one of the two ratios is the binding constraint, and the result tells you which. Housing allowed is H = max(0, min(front × G, back × G − O)), where G is gross monthly income, O is your other monthly debt and front and back are the ratios as fractions. The price is then the largest one whose principal, interest, tax, insurance, HOA fee and PMI add up to H.

Debt changes which limit binds. On 60,000 a year (5,000 a month) with no other debt, the housing limit of 1,400.00 is lower than the total-debt allowance of 1,800, so the front-end ratio binds and the price estimate is 216,615. Add 1,000 of monthly debt and the total-debt allowance falls to 800, so the back-end ratio binds, housing allowed drops to 800.00 and the price estimate drops to 123,780. Paying down a debt can therefore raise the price more than the same amount of extra income would. To see your own ratios for a specific payment, check front-end and back-end DTI.

Notice also how sensitive the price is to the cost assumptions. Property tax and insurance entered as a percentage of price scale with the price, so every extra dollar of price carries its own monthly tax and insurance, and the price that fits the same housing amount is lower when those percentages are higher. If you know the real tax and insurance for a specific home, switch those fields to dollars and the solver treats them as fixed, which usually gives a more accurate answer for that home than a generic percentage.

Taxes, insurance, PMI, HOA and maintenance

The ratios are about the housing payment a lender would count, and the calculator separates that from the wider cost of owning. Principal, interest, property tax, insurance, HOA fees and any mortgage insurance form the housing payment. Maintenance, which is an expected cost of owning but not a lender payment, appears alongside it as part of the full ownership cost. None of these values is looked up for you: the tax rate, insurance premium, HOA dues and PMI quote are all yours to enter. PMI is a yearly dollar amount that defaults to zero, so it is never added silently; if you enter a quote, it applies only when there is a loan.

The down payment is another lever, but it does not act alone. Holding the same income and debt, a 10% down payment gives an estimate of 368,135, 20% gives 402,286 and 30% gives 443,420. A larger down payment raises the price that fits because the loan, and so the principal and interest per dollar of price, is smaller, but the cash needed on day one rises from 47,858 to 146,328 across those three cases. The right amount depends on how much cash you hold, how much you want to keep in reserve and whether mortgage insurance would apply at a lower down payment.

Worked example: income budget versus all-in spending

Take gross monthly income of 10,000 (120,000 a year) and 1,000 of other monthly debt, with 28% and 36% planning ratios. The front-end limit is 2,800 and the back-end limit is 3,600 − 1,000 = 2,600, so back-end ratio binds and housing allowed is 2,600.00. At 6% over 30 years with 20% down, and tax plus insurance of 2% of the price each year, the price solves to 402,285.55. The down payment is 80,457.11, the loan is 321,828.44 and the monthly housing payment is 2,600.00, exactly the allowed amount. Maintenance of 1.5% a year adds 502.86 a month outside the ratio, so the full ownership cost is 3,102.86.

Now the other way. Suppose you simply decide that housing, including tax, insurance and maintenance, must cost 3,500 a month. With the same 20% down and costs of 3.5% of the price a year in total, the price solves to 453,775.16. The two answers are not comparable as better or worse; they answer different questions. One is limited by ratios applied to income, the other by a number you chose and a decision to count every cost inside it. Once you have a price range, estimate a monthly mortgage payment with your own rate quote.

Cash needed at closing

A price estimate is only half of the cash question. You also need the down payment, closing costs and whatever reserve you want to keep afterwards. Closing costs vary by location and loan, so the 3% default is an illustration, not a quote; replace it with the estimate your lender provides. On the example price, 20% down is 86,646 and 3% closing is 12,997, so the cash needed is 99,643 before any reserve. Closing costs are not financed in this model, and having the cash does not by itself make a purchase affordable. If you plan to hold a reserve, plan a reserve for unexpected costs first.

The cash side deserves the same scrutiny as the monthly side. Buyers are sometimes surprised by the gap between the down payment and the total cash needed, so look at the table of cash needed and the reserve field together. A reserve that keeps several months of expenses available after closing is one way to absorb a repair bill or a gap in income without borrowing. How much reserve is enough is personal, which is why the field is yours to set.

What if mortgage rates or costs rise?

Because the price is derived from a fixed monthly amount, a higher rate lowers it. The comparison button re-solves the same inputs at the entered rate and at one and two percentage points higher. On the worked example the estimates are 402,286 at 6.00%, 372,009 at 7.00% and 344,975 at 8.00%. That is arithmetic, not a forecast of where rates will go. Costs can rise too: if tax or insurance rises, the share of the monthly amount left for principal and interest shrinks. A price chosen with no cushion has no room for either.

Planning ratios and mortgage product limits

The 28/36 rule of thumb is a long-standing planning shorthand, not an approval requirement. Actual limits depend on the lender, the loan product and the underwriting method. For example, Fannie Mae’s Selling Guide lists a 36% maximum total DTI for manually underwritten loans, extendable to 45% when credit score and reserve requirements are met, and a 50% maximum for loans underwritten through its automated system (Fannie Mae Selling Guide B3-6-02); check the current version. The other presets here are illustrative ratios only. This calculator does not model FHA or VA loans, their insurance premiums, funding fees, residual-income tests or eligibility rules. For the tradeoff between paying a mortgage faster and investing, compare repayment with investing. These estimates are educational, not financial advice; see the disclaimer.

Before you act on an estimate, confirm the inputs against real quotes: your income as a lender would count it, your actual debt payments, a current rate quote, the tax bill for the property and an insurance quote. Then compare the full monthly ownership cost and the cash needed with your own budget, and keep a reserve. This tool is a way to frame the question, not a substitute for a lender’s review or for advice tailored to you.

House affordability FAQs

How much house can I afford on my income?

Enter gross household income, required debt payments and housing assumptions. The estimate shows the price supported by the selected ratios, not a lender-approved amount.

Can I calculate affordability from a monthly payment?

Yes. Use the fixed-budget tab and choose whether taxes, insurance, HOA, PMI and maintenance belong inside that budget.

Is the 28/36 rule a mortgage approval requirement?

It is a planning rule of thumb here. Actual limits vary by lender, loan product and underwriting method.

Does a larger down payment always solve affordability?

It reduces the loan needed, but taxes, insurance, other costs and available cash still matter. Compare both the monthly result and cash at closing.

Why is maintenance outside the income-ratio limit?

The ratio calculation separates selected housing obligations from a broader ownership budget. Maintenance still appears in total estimated spending and is included in the fixed-budget mode when selected.

Does this model FHA or VA loan eligibility?

No. Ratio presets are illustrative arithmetic. This calculator does not determine eligibility or fully model those programs' fees, insurance and other requirements.