Calculate Home Affordability
Find out how much house you can afford based on your income, debts, and down payment. This calculator uses the 28/36 rule and shows comfortable, stretch, and maximum home prices.
Your Home Affordability
Debt-to-Income Ratio Analysis
How Home Affordability Works
Lenders use debt-to-income ratios to determine how much house you can afford. The most common guideline is the 28/36 rule.
The 28/36 Rule
Spend no more than 28% of gross monthly income on housing (front-end DTI) and no more than 36% on all debts including housing (back-end DTI).
DTI Explained
Front-end DTI is housing payment divided by gross income. Back-end DTI is total debt payments (housing + car + student loans + credit cards) divided by gross income.
PMI Impact
With less than 20% down, you pay PMI (0.5-1% of loan amount per year). This increases your monthly payment and reduces the home price you can afford.
Down Payment
A larger down payment reduces your loan amount and monthly payment. At 20% down, you avoid PMI entirely, which can increase your buying power significantly.
Affordability Quick Reference
Approximate home prices by income at different DTI levels (assumes 20% down, 6.75% rate, 30-year term, 1.2% property tax, $1,500 annual insurance):
| Annual Income | 28% DTI | 36% DTI | 43% DTI |
|---|---|---|---|
| $50,000 | $175,000 | $235,000 | $285,000 |
| $75,000 | $275,000 | $365,000 | $440,000 |
| $100,000 | $370,000 | $490,000 | $590,000 |
| $125,000 | $465,000 | $620,000 | $745,000 |
| $150,000 | $560,000 | $745,000 | $895,000 |
| $200,000 | $750,000 | $1,000,000 | $1,200,000 |
These are estimates only. Actual affordability depends on debts, down payment, local taxes, insurance costs, and the interest rate you qualify for.
Frequently Asked Questions
How much house can I afford?
Home affordability depends on your gross income, monthly debts, down payment, and the interest rate. A common guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing (front-end DTI) and no more than 36% on total debts including housing (back-end DTI). Your actual affordable price depends on these factors plus property taxes, insurance, and HOA fees.
What is the 28/36 rule?
The 28/36 rule is a lending guideline: your housing payment should not exceed 28% of gross monthly income (front-end debt-to-income ratio), and total debt payments should not exceed 36% of gross income (back-end ratio). For example, with $6,000 monthly income, housing should be under $1,680 and total debts under $2,160.
What affects how much house I can afford?
Six key factors: (1) gross income -- higher income allows larger payments; (2) existing monthly debts -- car loans, student loans, credit cards reduce available budget; (3) down payment -- larger down payment means smaller loan; (4) interest rate -- higher rates reduce purchasing power; (5) property tax, insurance, HOA -- these add to monthly costs; (6) credit score -- affects the rate you qualify for.
What is PMI and how does it affect affordability?
PMI (Private Mortgage Insurance) is required on conventional loans when the down payment is less than 20%. It typically costs 0.5-1% of the loan amount per year. PMI increases your monthly payment, which reduces the home price you can afford under DTI limits. For example, $200/month in PMI could reduce your affordable home price by $30,000-$40,000.
How does down payment affect home affordability?
A larger down payment reduces the loan amount, lowering monthly principal and interest. It also eliminates PMI if you put down 20% or more. For example, with $6,000 monthly income and 28% front-end DTI, you can afford $1,680/month in housing. A 20% down payment might qualify you for a $350,000 home, while 3% down might only qualify you for $280,000 due to higher monthly payments and PMI.
What is the difference between front-end and back-end DTI?
Front-end DTI is your housing payment (principal, interest, taxes, insurance, HOA) divided by gross monthly income. Back-end DTI is all debt payments (housing plus car loans, student loans, credit cards, etc.) divided by gross income. Lenders evaluate both. A 28% front-end and 36% back-end DTI are conservative targets.
Can I afford more than 28% DTI?
Yes, many lenders approve borrowers up to 43% or even 50% DTI, especially with strong credit and reserves. However, higher DTI means less financial cushion for emergencies, maintenance, or rate increases. The 28% guideline is conservative -- designed to keep housing affordable even if income drops or expenses rise.
Does this calculator store my financial data?
No. All calculations run entirely in your browser using JavaScript. No income, debt, or financial data is sent to any server. Nothing is stored or logged.
Related Tools
- Mortgage Calculator -- calculate monthly mortgage payments and total interest
- Loan Calculator -- estimate payments for any fixed-rate loan
- Down Payment Calculator -- see how much cash you need and the PMI impact
- Debt Payoff Calculator -- plan paying off debts to improve DTI before buying
- Loan Amortization Schedule -- see month-by-month principal vs. interest breakdown
Privacy & Limitations
- Client-side only. No data is sent to any server. No cookies, no tracking of inputs.
- Estimates only. This calculator provides a mathematical estimate based on the 28/36 rule. Actual loan approval depends on credit score, employment history, assets, loan program, and lender-specific requirements.
- Not financial advice. This tool is for educational purposes. Mortgage decisions involve many personal and financial factors. Consult a mortgage professional or financial advisor for personalized guidance.
- Does not account for all costs. Maintenance, repairs, utilities, and homeowners association special assessments are not included in these estimates.
- Interest rates vary. The rate you qualify for depends on credit score, down payment, loan type, and market conditions. A small rate difference significantly affects affordability.
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Home Affordability Calculator FAQ
How much house can I afford?
Home affordability depends on your gross income, monthly debts, down payment, and the interest rate. A common guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing (front-end DTI) and no more than 36% on total debts including housing (back-end DTI). Your actual affordable price depends on these factors plus property taxes, insurance, and HOA fees.
What is the 28/36 rule?
The 28/36 rule is a lending guideline: your housing payment should not exceed 28% of gross monthly income (front-end debt-to-income ratio), and total debt payments should not exceed 36% of gross income (back-end ratio). For example, with $6,000 monthly income, housing should be under $1,680 and total debts under $2,160.
What affects how much house I can afford?
Home affordability is affected by: (1) gross income -- higher income allows larger payments; (2) existing monthly debts -- car loans, student loans, credit cards reduce available budget; (3) down payment -- larger down payment means smaller loan; (4) interest rate -- higher rates reduce purchasing power; (5) property tax, insurance, HOA -- these add to monthly costs; (6) credit score -- affects the rate you qualify for.
What is PMI and how does it affect affordability?
PMI (Private Mortgage Insurance) is required on conventional loans when the down payment is less than 20%. It typically costs 0.5-1% of the loan amount per year. PMI increases your monthly payment, which reduces the home price you can afford under DTI limits. For example, $200/month in PMI could reduce your affordable home price by $30,000-$40,000.
How does down payment affect home affordability?
A larger down payment reduces the loan amount, lowering monthly principal and interest. It also eliminates PMI if you put down 20% or more. For example, with $6,000 monthly income and 28% front-end DTI, you can afford $1,680/month in housing. A 20% down payment might qualify you for a $350,000 home, while 3% down might only qualify you for $280,000 due to higher monthly payments and PMI.
Does this calculator store my financial data?
No. All calculations run entirely in your browser using JavaScript. No income, debt, or financial data is sent to any server. Nothing is stored or logged.