Home Affordability Calculator

Calculate how much house you can afford based on income and debts.

Calculator Inputs

Enter your details and click "Calculate" to see your results

About This Calculator

Calculate how much house you can afford based on income and debts. This calculator helps you make informed financial decisions by providing accurate calculations and detailed breakdowns.

Use this tool to plan your finances, compare options, and understand the long-term impact of your financial decisions.

Affordability Formulas & Equations

Maximum Home Price Formula

Max Price = (Max Monthly Payment × (1+r)ⁿ - 1) / (r × (1+r)ⁿ) + Down Payment
  • Max Monthly Payment = Based on DTI ratio limits
  • r = Monthly interest rate
  • n = Total months in loan term

Debt-to-Income (DTI) Ratio

DTI = (Monthly Debts + Housing Payment) / Gross Monthly Income × 100%
  • Front-End DTI = Housing costs only (ideal: ≤28%)
  • Back-End DTI = All debts including housing (ideal: ≤36%)

28/36 Rule

Max Housing = Income × 0.28 | Max Total Debt = Income × 0.36

Lenders typically prefer housing costs below 28% of gross income and total debt below 36%.

Example Calculation

For $8,000/month income with $500 existing debt:

  • • Max housing (28%): $8,000 × 0.28 = $2,240/month
  • • Max total debt (36%): $8,000 × 0.36 = $2,880/month
  • • Max housing with debt: $2,880 - $500 = $2,380/month
  • • Conservative max: $2,240/month

Frequently Asked Questions

How accurate are these calculations?

Our calculators use industry-standard formulas and are designed to provide accurate estimates. However, actual results may vary based on your specific situation and lender terms.

Can I trust these results?

Yes, our calculations are based on proven financial formulas. However, always consult with a financial advisor for personalized advice.