Mortgage Affordability Calculator

Enter your income, debts, interest rate, loan term, down payment, taxes, and insurance to find out how much home you can afford — including your max loan amount, monthly payment, and DTI ratios.
Luis GonzalezCreated by Luis GonzalezLast updated:

How to Use This Calculator

  1. 1

    Enter Your Gross Annual Income

    Input your total household income before taxes.

  2. 2

    Enter Monthly Debt Payments

    List all recurring debt obligations: car loans, student loans, credit cards, etc.

  3. 3

    Enter Your Down Payment

    Input the amount saved for a down payment.

  4. 4

    Set Estimated Rates and Costs

    Enter the expected interest rate, property tax rate, and insurance costs.

  5. 5

    Review Affordability

    See the maximum home price and loan amount you can comfortably afford.

Example Calculation

A couple determining how much home they can afford.

Combined Income

$120,000/year

Monthly Debts

$800

Down Payment

$50,000

Interest Rate

6.5%

Property Tax Rate

1.2%

Annual Insurance

$2,400

Results

Maximum home price at 28% front-end ratio

$420,000. Maximum home price at 36% back-end ratio: $395,000. Recommended home price (conservative): $370,000. Monthly payment at $370,000: $2,660.

Tips

Use the Conservative Estimate

Lenders may approve you for more than you should borrow. Aim for a payment that is 25% or less of your take-home pay.

Include Hidden Costs

Budget for maintenance, repairs, HOA fees, and furniture. These can add $300-$800+ per month to your housing costs beyond the mortgage.

Plan for the Future

Consider upcoming life changes like children, career moves, or retirement. Your mortgage payment should remain comfortable through these transitions.

Test Drive the Payment

Before buying, save the difference between your current rent and the projected mortgage payment each month for 3-6 months to see if it is comfortable.

The Mortgage Affordability Calculator helps prospective homebuyers determine how much home they can realistically afford based on their income, debts, and financial profile.

It applies the standard 28/36 lender guidelines to calculate your maximum affordable home price, loan amount, monthly payment, and key DTI ratios.

For example, an individual with a $5,000 monthly income, $500 in debts, and a $20,000 down payment can afford a home up to $229,461 with a 4% interest rate over 30 years.

Debt-to-income (DTI) ratios are fundamental metrics lenders use to assess your capacity to take on and repay a mortgage in 2026.

The "28/36 rule" is the most widely recognized benchmark: your front-end DTI (housing costs only) should ideally be no more than 28% of your gross monthly income, while your back-end DTI (all monthly debts, including housing) should not exceed 36%.

Some loan programs, like FHA loans, may allow for slightly higher ratios — up to 31% for the front-end and 43% for the back-end.

This calculator uses both limits and takes the more conservative result, ensuring you get a realistic affordability estimate that most lenders would approve.

💡 Before determining how much home you can afford, consider if buying is the right move for your situation with our Rent vs Mortgage Cost Comparison Calculator.

Calculating Your Maximum Mortgage Affordability

This calculator determines your maximum affordable mortgage by first calculating the maximum monthly P&I payment you can afford based on both the front-end (28% of income minus taxes and insurance) and back-end (36% of income minus all debts, taxes, and insurance) limits.

It takes the lower of the two.

This affordable P&I payment is then fed into the standard loan amortization formula in reverse to determine the maximum loan principal that payment can support.

monthlyRate = annualInterestRate / 12 / 100
numPayments = loanTerm × 12

maxMortgagePayment = (grossMonthlyIncome × 0.28) - propertyTaxes - homeInsurance
maxDtiPayment = (grossMonthlyIncome × 0.36) - monthlyDebts - propertyTaxes - homeInsurance
affordablePI = min(maxMortgagePayment, maxDtiPayment)

maxLoanAmount = (affordablePI × ((1 + monthlyRate)^numPayments - 1)) / (monthlyRate × (1 + monthlyRate)^numPayments)
homePrice = maxLoanAmount + downPayment

Determining Affordability for a $5,000 Monthly Income

Let's assess the affordability for an individual with the following financial profile:

  1. Gross Monthly Income: $5,000
  2. Monthly Debts: $500
  3. Annual Interest Rate: 4%
  4. Loan Term: 30 years
  5. Down Payment: $20,000
  6. Monthly Property Taxes: $200
  7. Monthly Home Insurance: $100

  • Step 1: Calculate Maximum Housing Payment (Front-End).Max Housing PITI = $5,000 × 0.28 = $1,400Affordable P&I (Front-End) = $1,400 - $200 (Taxes) - $100 (Insurance) = $1,100

  • Step 2: Calculate Maximum Total Debt Payment (Back-End).Max Total Debt = $5,000 × 0.36 = $1,800Affordable P&I (Back-End) = $1,800 - $500 (Debts) - $200 (Taxes) - $100 (Insurance) = $1,000

  • Step 3: Determine Actual Affordable P&I Payment.Affordable P&I = min($1,100, $1,000) = $1,000

  • Step 4: Calculate Max Loan Amount. Using the $1,000 P&I payment, a 4% rate, and 30-year term, the Max Loan Amount is approximately $209,461.

  • Step 5: Calculate Max Home Price.Max Home Price = $209,461 (Loan) + $20,000 (Down Payment) = $229,461

This individual can afford a maximum home price of $229,461, with a monthly mortgage payment of $1,000 (P&I only).

The front-end DTI is 26.0% (under 28%) and the back-end DTI is 36.0% (at the 36% limit).

The Insights panel shows that after all housing obligations ($1,800/month), $3,200/month remains for other expenses.

💡 If you're buying a home with a partner, our Shared Mortgage Payment Split Calculator can help divide the monthly obligations fairly and confirm overall affordability.

Affordability Factors Beyond DTI and Income

While DTI ratios and income are crucial, true home affordability extends beyond these metrics.

Emergency savings are vital — experts recommend having 3-6 months of living expenses readily available.

Closing costs, typically 2-5% of the loan amount, are upfront expenses that can significantly impact your available cash.

For a $209,000 loan, this could mean an additional $4,200-$10,500.

Ongoing maintenance costs are also important, with a general rule of budgeting 1-4% of your home's value annually.

Finally, consider your future financial goals — aggressive mortgage payments might limit savings for retirement or children's education.

Frequently Asked Questions

How much mortgage can I afford?

Most lenders use the 28/36 rule: housing costs should not exceed 28% of gross monthly income, and total debt payments should stay under 36%. On a $75,000 salary, this means a maximum housing payment of about $1,750 per month including taxes and insurance.

What factors affect how much I can afford?

Key factors include your gross income, existing monthly debts, down payment amount, interest rate, property taxes, homeowners insurance, PMI, and HOA fees. Your credit score affects the rate you qualify for, which significantly impacts affordability.

Should I borrow the maximum I am approved for?

Financial experts generally advise against borrowing the maximum. Leave room for unexpected expenses, lifestyle costs, and savings goals. A mortgage that is 20-25% of your take-home pay (rather than 28% of gross) provides a more comfortable financial cushion.

How do property taxes and insurance affect affordability?

Property taxes (typically 0.5-2.5% of home value annually) and insurance ($1,000-$3,000+ per year) can add $300-$800 or more to your monthly payment. Always include these costs when determining what you can afford, as they reduce your available budget for the loan itself.