Home Affordability Calculator
Determine a comfortable home budget based on your income, debts, and down payment using the 28/36 rule.
e.g., car payments, student loans, credit cards. Do not include rent.
Affordable Home Price
$324,251
Based on a total monthly payment of $1,867
Principal & Interest
$1,417
Taxes & Insurance
$449
How this works
Finds the maximum home price whose estimated monthly payment (principal & interest, property tax, home insurance, HOA, and PMI when applicable) fits within your front-end and back-end debt-to-income limits, using a binary search since PMI switching on makes the payment a non-linear function of price.
Key assumptions
- Default DTI limits follow the conventional 28/36 rule: 28% front-end (housing only), 36% back-end (housing plus other debts).
- PMI is included in the DTI test whenever the resulting loan-to-value exceeds 80%, at a default 0.5%/yr rate — real underwriting does the same.
- Unlike the Mortgage calculator, PMI dropping off over time is not modeled here, since this calculator only solves for a single point-in-time affordability figure.
What this leaves out
- Amortization over time — this is a point-in-time affordability figure, not a payment schedule.
- Closing costs, moving costs, or cash-on-hand requirements beyond the down payment.
- Underwriting overlays beyond DTI (credit score, reserves, loan program limits).
Related calculators
A worked example: what $80,000 of income actually buys
An $80,000 gross income, $500 a month of existing debt payments, $100,000 saved for a down payment, a 6.5% rate over 30 years, property tax at 1.2% and $1,500 a year of insurance. Applying the conventional 28/36 debt-to-income limits, the maximum affordable price is $324,251.
The total monthly housing payment at that price is $1,866.67 — $1,417.42 of principal and interest, $324.25 of property tax and $125 of insurance. That total is exactly 28% of gross monthly income, which tells you which constraint is doing the work: the front-end limit binds first. The back-end limit would allow $2,400 of total debt service, and after the $500 of existing debts there is $1,900 of room — more than the $1,866.67 the front-end rule permits.
That has a practical consequence worth noting. Clearing the $500 of monthly debt entirely would not raise the affordable price at all, because the front-end limit is what is binding. The levers that do move it are the down payment, the rate, and the income. Note also that the $100,000 down payment against a $324,251 price is a 69% loan-to-value, comfortably under 80%, so no PMI is charged in this test.
Frequently asked questions
What is the 28/36 rule?
A conventional underwriting guideline with two parts. The front-end ratio caps housing costs — principal, interest, taxes and insurance, plus HOA and PMI where they apply — at 28% of gross monthly income. The back-end ratio caps all debt service, housing plus car loans, student loans and credit card minimums, at 36%. This calculator applies both and returns the lower of the two resulting prices. Both limits are defaults you can change: FHA loans commonly allow 43% on the back end, and many lenders go higher with compensating factors.
Why did paying off my other debts not increase what I can afford?
Because the front-end ratio was binding rather than the back-end one, which is exactly what happens in the example above. Other debts only enter the back-end test, so clearing them raises your ceiling only if the back-end limit was the constraint. Enter your figures and compare the two: if the total payment shown equals 28% of your gross monthly income, the front-end is binding and debt payoff will not move the price.
Is what I can borrow the same as what I should spend?
No, and this is the most important caveat on the page. These ratios describe what a lender will approve, and lenders are underwriting default risk, not your financial independence. They take no view on retirement contributions, childcare, or the fact that gross income is not money you have. Someone maximizing an approval at 28% of gross is committing well over a third of take-home to housing. The FI Impact calculator shows what that choice does to your FI timeline, which is the number this one cannot tell you.
Why is the payment estimate based on gross income rather than take-home?
Because that is how underwriting works, and the calculator's job here is to predict a lender's answer rather than to give budgeting advice. Debt-to-income ratios are defined against gross income industry-wide. The gap is large: 28% of gross is roughly 36% of take-home at a 22% effective tax rate. Keep that conversion in mind when you read the result.
What does this leave out of the cash I need?
Quite a lot. Closing costs typically run 2-5% of the price on top of the down payment, and lenders often want cash reserves after closing. Underwriting overlays beyond DTI — credit score, employment history, loan program limits — are not modeled, and neither is amortization over time, since this solves for a single point-in-time figure. It also does not model PMI dropping off later, unlike the Mortgage calculator, because there is no schedule here to drop it from.
Sources
- Primary Mortgage Market Survey
Freddie Mac — checked 2026-08-12
Weekly national average mortgage rate survey, a standard reference for the default mortgage rate.
- 30-Year Fixed Rate Mortgage Average in the United States (MORTGAGE30US)
Federal Reserve Bank of St. Louis (FRED) — checked 2026-08-12
Same series as the Freddie Mac PMMS, republished by FRED.
- What is a debt-to-income ratio?
Consumer Financial Protection Bureau — checked 2026-08-12
Defines DTI as total monthly debt payments divided by gross monthly income, matching this calculator's inputs. The page does not itself endorse the specific 28/36 front-end/back-end thresholds this calculator defaults to — those are a common lending convention, not a CFPB rule — so it is cited for the DTI definition, not the exact percentages.
*The calculations provided are for illustrative purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any decisions.