Home Affordability Calculator
Estimate the maximum home price you can afford either from your income using a lender debt-to-income rule, or by reverse-solving from a fixed monthly housing budget. Choose a conventional 28/36, FHA or VA rule, fold in property tax, insurance, HOA dues and PMI, and see a full monthly payment breakdown.
Formula
Worked example
Income $90,000/yr ($7,500/mo) with $400/mo other debt under the conventional 28/36 rule. Front-end cap = 0.28 × 7,500 = $2,100; back-end cap = 0.36 × 7,500 − 400 = $2,300, so the housing budget is the smaller $2,100. At 6.5% over 30 years with $40,000 down, 1.1% tax, 0.4% insurance and no HOA, that payment supports a home price near $300,000. Since $40,000 is over 13% down, PMI applies until you reach 20% equity.
How the 28/36 rule sets your budget
Lenders judge affordability with two debt-to-income ratios. The front-end ratio caps your total monthly housing payment, principal, interest, property taxes, insurance, HOA dues and mortgage insurance, at a share of your gross monthly income. The back-end ratio caps housing plus every other recurring debt, such as car and student loans and credit-card minimums, at a higher share. A conventional loan uses 28% and 36%, an FHA loan typically allows 31% and 43%, and VA loans focus on a single 41% back-end figure. This calculator computes both ceilings and uses the smaller one, because the lower limit is the one that actually constrains how much house you can buy. Choose Custom to set your own ratios.
From a monthly payment to a home price
Once the affordable monthly payment is known, the calculator works backwards. Fixed HOA dues are set aside first since they do not change with the price. A share of what remains goes to property tax and insurance, which scale with the home value, while the rest covers principal, interest and, when your down payment is under 20%, private mortgage insurance (PMI) on the loan. Using the standard mortgage amortization formula, that loan-related portion is converted into a maximum loan amount, and adding your down payment yields the maximum purchase price. Because PMI depends on the down-payment percentage, which itself depends on the price, the calculator solves once without PMI, checks whether you cross the 20% threshold, and re-solves with PMI folded in when needed.
Income mode versus fixed-budget mode
Income mode answers "given my pay and debts, how much house do the lender rules allow?" Fixed-budget mode flips the question: you set a monthly housing payment you are comfortable with, and the calculator reverse-solves the home price that payment supports at your rate, term and costs, ignoring income ratios. Budget mode is useful when you already know your comfort zone, are self-employed with irregular income, or want to cap your payment below what a lender would approve. In both modes the result is broken into principal and interest, tax and insurance, HOA and PMI so you can see exactly where each dollar goes.
What the estimate leaves out
This is a planning tool, not a loan approval. It does not include closing costs (typically 2% to 5% of the price), one-off moving expenses, or the maintenance and utilities that come with ownership (budget roughly 1% of the home value per year for upkeep). Lenders also review your credit score, employment history and cash reserves. Treat the result as the upper edge of your range, then leave room in your budget for the costs a ratio cannot capture.
Loan-type debt-to-income rules
| Loan type | Front-end | Back-end |
|---|---|---|
| Conventional | 28% | 36% |
| FHA | 31% | 43% |
| VA | n/a | 41% |
| Custom | You choose | You choose |
Typical front-end (housing) and back-end (total debt) ceilings by loan program.
Frequently asked questions
What is the 28/36 rule?
It is a conventional-loan guideline: spend no more than 28% of your gross monthly income on housing (the front-end ratio) and no more than 36% on all debts combined including housing (the back-end ratio). Staying inside both keeps payments manageable. FHA loans typically allow 31/43 and VA loans about 41% back-end.
How does the fixed-budget mode work?
Switch the mode to "A fixed monthly budget" and enter the total monthly housing payment you want to cap at. The calculator reverse-solves the maximum home price that payment supports at your interest rate, term, tax, insurance, HOA and PMI, ignoring income-based DTI limits. It is handy when you already know your comfort zone or have irregular income.
When is PMI added, and how much is it?
Private mortgage insurance applies on conventional loans when your down payment is under 20% of the price. This calculator adds it automatically using your PMI rate (about 0.5% of the loan per year by default) and drops it once your down payment reaches 20%. PMI typically falls off later as you build 20% equity through payments or appreciation.
Does a bigger down payment let me afford more?
Yes. A larger down payment reduces the loan needed at any given price, so the same monthly payment can support a higher home price. It also helps you reach 20% down, which removes PMI and lowers your monthly cost, freeing more of your budget for principal and interest.