Mortgage Affordability Calculator
Wondering how much home you can realistically afford? This calculator uses the standard 28/36 debt-to-income rules to estimate your maximum monthly payment and home price. Enter your income, debts, and loan terms to see a quick affordability estimate.
How it works
Lenders commonly use the 28/36 rule: your housing costs should stay under 28% of gross monthly income (front-end ratio), and your total debt payments should stay under 36% (back-end ratio). This tool takes the lower of those two limits as your maximum affordable monthly payment.
We assume roughly 25% of that payment covers property taxes and insurance, leaving 75% for principal and interest. We then reverse the amortization formula — P = M × (1 − (1+r)^−n) / r — to find the largest loan that fits, then add your down payment to estimate a home price.
Tips
Paying down existing debts before applying lowers your back-end ratio and can dramatically increase how much home you qualify for.
A larger down payment reduces your loan amount, may eliminate private mortgage insurance (PMI), and can secure a better rate. Always leave room in your budget for maintenance, utilities, and emergencies.
FAQ
What is the 28/36 rule?
It's a common lending guideline: spend no more than 28% of gross monthly income on housing and no more than 36% on total debt, including the mortgage. Many lenders allow higher ratios for strong credit profiles.
Does this include property taxes and insurance?
Yes, roughly. We reserve about 25% of your maximum payment for taxes and insurance. Actual amounts vary widely by location, so check local tax rates and insurance quotes for accuracy.
Why is my estimate different from a lender's?
Lenders factor in credit score, employment history, PMI, HOA fees, and exact tax/insurance figures. This tool is a quick estimate to guide your search, not a loan approval.