The formula
How it works
Estimate the home price you can afford, based on your income, existing debts and down payment. It uses the classic 28/36 rule that lenders apply to keep your housing and total debt payments within safe limits.
FAQ
What is the 28/36 rule?
A lending guideline that your housing payment should not exceed 28% of gross monthly income, and all your debt payments together should not exceed 36%. The calculator takes the lower of the two limits to set a safe payment.
Does this include taxes and insurance?
This estimate is based on the loan payment. Real housing costs also include property taxes, insurance and sometimes HOA fees, so budget a bit below the maximum to leave room for those.
How does a bigger down payment change what I can afford?
A bigger down payment does not raise your affordable monthly payment, but it does raise the home price that payment can support, since less of the price needs to be financed. It also reduces the loan amount and total interest paid.
How do existing debts affect my affordability?
Debts count against the 36% back-end limit, so the more you owe each month, the less room is left for a housing payment. Paying down debt before applying can meaningfully raise the home price you qualify for.
What if my results differ from what a lender offers?
Lenders also weigh your credit score, employment history, cash reserves and the specific loan program, so their number can be higher or lower than this estimate. Treat this calculator as a starting budget rather than a guaranteed approval amount.
Should I borrow up to the maximum this calculator shows?
Not necessarily — the 28/36 rule marks a safe ceiling, not a target. Many buyers choose to borrow less than the maximum so they keep a comfortable cushion for savings and unexpected expenses.
How does the interest rate affect the maximum home price?
A higher rate means more of each monthly payment goes to interest, shrinking the loan amount your affordable payment can support. Even a one-point rate increase can noticeably lower the maximum home price.
About the house affordability calculator
This calculator estimates how expensive a home you can realistically afford, using your income, your existing debts and the down payment you have saved. Lenders do not just look at income — they check that your housing and total debt payments stay within safe percentages of what you earn. By working within those limits and the mortgage terms, this tool turns your finances into a maximum home price.
How to use it
Enter your gross annual income, your total monthly debt payments, your down payment, and the mortgage rate and term. The calculator works out the largest monthly payment you can safely afford under the 28/36 rule, converts that into a loan amount, and adds your down payment to give a maximum home price. For example, an $80,000 income with modest debts and a $40,000 down payment might support a home priced around $350,000.
The formula
The affordable payment is the smaller of two limits: , where is gross monthly income and is your monthly debt. That payment is then run backwards through the mortgage formula to find the largest loan it supports, and the down payment is added on top to give the home price. Keeping debts low raises the back-end limit and lets you afford more.
Where it is used
Home buyers use it early in their search to set a realistic budget and avoid falling for houses out of reach. Lenders apply the same DTI rules when pre-approving mortgages, so the estimate lines up with what you are likely to be offered. It pairs naturally with mortgage and down-payment calculators to plan a purchase from budget to monthly payment.