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This calculator works the way lenders do: it starts from your income and works backward to a price. First it computes your payment cap with the 28/36 rule: the lower of 28% of your gross monthly income and 36% of gross monthly income minus your other monthly debts. Whichever limit binds sets the maximum full monthly housing payment you can carry. Next it splits that payment into its parts. The principal and interest come from the standard amortization formula, P&I = loan × r(1+r)ⁿ / ((1+r)ⁿ - 1), where the loan is the price minus your down payment. Property tax and insurance are priced as a share of the home price, so the full payment PITI(price) rises with the price. The calculator solves for the largest price whose full payment exactly hits your cap, then adds your down payment back to report the maximum home price. The results show the maximum price, the full monthly payment with its P&I, tax, and insurance breakdown, the loan amount, and the total interest over the life of the loan, with a chart comparing loan principal to lifetime interest. Remember these are estimates for planning, not professional financial advice: a lender will also weigh your credit score, savings, and job history before approving anything.
A mortgage affordability calculator answers the question every buyer asks first: how much house can I afford? You enter your annual income, monthly debts, down payment, interest rate, and loan term, and it applies the lender-standard 28/36 rule to find the maximum home price whose full monthly payment fits your budget. It also breaks that payment into principal and interest, property tax, and insurance, and shows the lifetime interest, so you see the true cost, not just the price tag. These are planning estimates, not professional financial advice and not a loan approval.
Start by picking your currency. Enter your gross annual household income before taxes, including salary, bonuses, and other regular income. Enter your total monthly debt payments: car loans, student loans, credit card minimums, personal loans. Enter your down payment savings, the expected mortgage interest rate, and the loan term. Set your property tax rate (about 1.1% is the national average) and annual homeowners insurance. The calculator instantly shows your maximum home price, the full monthly payment with its breakdown, and the lifetime interest.
Lenders use the 28/36 rule: your housing costs should not exceed 28% of gross monthly income (the front-end ratio), and your total debts including housing should not exceed 36% (the back-end ratio). Step one: payment_cap = min(28% × gross_monthly_income, 36% × gross_monthly_income - monthly_debts). The tighter of the two limits sets your budget. Step two: the full monthly payment on a price P is PITI(P) = P&I(loan) + P × tax_rate/12 + insurance/12, where P&I comes from the amortization formula P&I = loan × r(1+r)ⁿ / ((1+r)ⁿ - 1), loan = P - down_payment, r = rate/12, n = years × 12. Step three: solve for the largest price P where PITI(P) = payment_cap, then max_price = P. Worked example: $100,000 income, $500 debts, $60,000 down, 6.75% for 30 years, 1.1% tax, $2,400 insurance gives a $2,333 cap and a maximum price of about $340,755, with $1,821 P&I, $312 tax, and $200 insurance.
Four things move your number most. Income and existing debts set the payment cap: every $200 of monthly debt can cut roughly $25,000 off your buying power. The interest rate decides how much loan that payment buys: on a $100,000 salary, a 1% lower rate adds roughly $23,000 to the affordable price. Property tax and insurance eat the same 28% budget, so a high-tax area leaves less room for principal and interest. The down payment both raises the price directly and, at 20%, eliminates PMI. Test each one above to see which lever helps you most.
The maximum is a ceiling, not a target. Lenders approve the max, but the max leaves little room for the costs that never appear in a DTI calculation: maintenance (budget about 1% of the home value per year), closing costs (2 to 6% of the loan), moving, furnishing, and the emergency fund that makes a tight payment stressful. Many buyers aim below their maximum, around the 25% front-end mark, for a payment that stays comfortable when life happens. Use the maximum to know your boundary, then choose a home that fits your life, not just your ratios.
The 28/36 guideline is for conventional loans. FHA loans allow about 31% housing and 43% total debt, stretching higher with strong compensating factors like cash reserves or a high credit score. VA loans look for about 41% total debt with no down payment and no PMI. Many conventional lenders approve back-end ratios up to 43 to 45% for otherwise strong borrowers. Higher limits mean a bigger approved price, but also a tighter monthly budget and more risk of becoming house poor. Whatever the program, the math on this page shows you exactly which limit binds: your income or your debts.
On a $100,000 salary with $500 in monthly debts, a $60,000 down payment, a 30-year loan at 6.75%, 1.1% property tax, and $2,400 annual insurance, the 28/36 rule supports a home price of about $340,755 with a $2,333 monthly payment. (This is the classic 100k salary example used across lender guides.) More debt, a higher rate, or higher taxes lower the number; a bigger down payment raises it. Enter your own figures above for your exact price.
The 28/36 rule is the lender guideline for conventional loans: your monthly housing costs (principal, interest, taxes, insurance, HOA, PMI) should stay at or under 28% of gross monthly income, and all your debts together including housing should stay at or under 36%. It is a guideline, not a law, but it is the standard way lenders judge whether a payment fits your income.
The front-end ratio is your housing costs divided by gross monthly income; lenders like it at 28% or under. The back-end ratio is all monthly debts including the new mortgage divided by gross income; the guideline is 36% or under. When people say DTI without qualifying it, they usually mean the back-end ratio.
Include recurring monthly debt obligations: car loans, student loans, credit card minimum payments, personal loans, child support, and alimony. Do not include utilities, groceries, subscriptions, insurance premiums, or everyday living expenses. Lenders count debts that appear as fixed obligations, which is why an approved DTI and a comfortable budget can differ.
It depends on the loan type. Conventional loans start at 3%, FHA at 3.5%, and VA and USDA loans need 0% down. But putting down less than 20% on a conventional loan means paying private mortgage insurance, which adds to your monthly payment and shrinks the price you can afford. 20% is the line where PMI drops off.
A lot. On a $100,000 salary with 10% down, a 1% lower rate raises the affordable home price by about $23,000 under the 28% rule, because more of each monthly dollar goes to principal and interest instead of interest alone. This is why shopping lenders for even a quarter point matters.
Not necessarily. The maximum a lender approves does not account for maintenance (about 1% of home value per year), closing costs (2 to 6% of the loan), or emergencies. Many buyers choose a price below their maximum for a more comfortable payment. This calculator shows the ceiling so you can decide where under it you want to live.
Yes. The 28% front-end limit covers the full housing payment: principal, interest, property taxes, homeowners insurance, and PMI. Because taxes and insurance come out of the same budget, a home in a high-tax county or high-premium state leaves less room for principal and interest, which lowers the price you can afford.
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