Home Affordability Calculator
Find your maximum home price based on income, debts, and down payment using the 28/36 lending rule.
Maximum Home Price
$319,367
Recommended for financial peace of mind
$238,315
Est. monthly: $1,500
The most a lender would likely approve
$319,367
Est. monthly: $2,100
Max Loan Amount
$259,367
Est. Monthly Payment
$2,100
PMI May Apply
With less than 20% down, most lenders require Private Mortgage Insurance (PMI) — a small monthly fee that protects the lender. This typically adds $50–$200 to your monthly payment depending on your loan size.
Front-End DTI
28.0%
Back-End DTI
34.7%
Based on the 28/36 rule: housing costs ≤ 28% of gross income, all debts ≤ 36%.
Your Monthly Payment Breakdown
Based on your estimated monthly payment of $2,200
* PMI estimate is approximate. Actual amount depends on your lender and credit score.
How to Use This Home Affordability Calculator
1. Enter Your Annual Gross Income. Enter your gross annual income, before taxes.
2. Enter Your Monthly Debt Payments. Fill in your total monthly payments outside of housing — car loan, credit cards, personal loans, etc.
3. Enter Your Down Payment. Enter how much you've already saved for a down payment.
4. Enter the Annual Interest Rate & Property Tax Rate. Enter today's typical mortgage rate and property tax percentage for your area.
5. Enter Your Annual Home Insurance. Enter your estimated yearly homeowners insurance cost.
6. Read Your Results. See Maximum Home Price, Max Loan Amount, Est. Monthly Payment, and Front-End & Back-End DTI. Whichever limit is stricter sets your max home price.
Nina earns $72,000 a year ($6,000 a month) and still has a $700 monthly car payment. With a $30,000 down payment, a 6.5% rate, a 1.2% property tax rate, and $100 a month in insurance, the calculator shows her Back-End DTI (36%) as the stricter limit — not Front-End — because her car payment eats into that 36% allowance. Her Maximum Home Price comes out to roughly $211,700. Curious, she tries removing the car payment from the calculator entirely, as if it were already paid off, and the number jumps to around $241,700 — a $30,000 increase, because Front-End (28%) becomes the binding limit instead. What catches Nina off guard is realizing that getting that same $30,000 boost through a bigger down payment alone would require adding roughly $34,800 more to her savings — far more than whatever's left on her car loan, which might only be a few thousand dollars. Armed with that math, Nina decides to focus on paying off the car loan before she starts seriously house hunting.
Key Terms
28/36 Rule
Housing costs should stay ≤ 28% of gross monthly income (Front-End), and total debt should stay ≤ 36% (Back-End).
Front-End DTI
The percentage of your income going specifically toward housing costs — principal, interest, taxes, and insurance.
Back-End DTI
The percentage of your income going toward ALL debt, including housing plus car payments, credit cards, and other loans.
Monthly Debt Payments
Your total non-housing monthly payments. Larger non-housing debt makes Back-End DTI the binding limit.
Maximum Home Price
The highest home price that satisfies both 28% and 36% limits simultaneously using iterative binary search.
Why Paying Off a Small Debt Might Raise Your Max Home Price More Than a Bigger Down Payment
Most people assume the best way to boost their home-buying power is to save more for a down payment. Depending on your situation, though, paying off an existing debt can move the needle further — and cost a lot less to do it.
Which Limit Is Actually Holding Your Price Down
This calculator always applies whichever limit is stricter between Front-End (28%) and Back-End (36%). If you're carrying other monthly debt, Back-End is often the one holding you back.
The Numbers That Prove This Isn't Just Theory
On a $6,000 monthly income with a $700 car payment, Back-End caps Maximum Home Price at ~$211,700. Once that car payment is gone, Front-End takes over and price climbs to ~$241,700 — a $30,000 jump.
Weigh the Cost Before You Decide
Getting that same $30,000 increase through a down payment alone would take about $34,800 more in savings — far more than whatever's left on a small car loan.
Frequently Asked Questions
Tips for First-Time Home Buyers
Buying your first home is exciting — but it can also feel overwhelming. Here are a few simple tips to help you make a smarter decision before you start house hunting.
Spend less than your maximum. This calculator shows the highest price you could afford. But that does not mean you should. Try to keep your monthly payment around 20–25% of your take-home income. That way, you still have money left for savings, emergencies, and everyday life.
Remember: a mortgage is not your only cost. On top of your monthly payment, you will also pay for things like repairs, utility bills, and general upkeep. A simple rule — set aside about 1% of your home's price every year just for maintenance. For a $300,000 home, that is around $250 a month.
Save more than just your down payment. Most people forget about closing costs — the fees you pay to finalize the home purchase. These usually add up to 2–5% of the loan amount. So if you are borrowing $250,000, expect to pay an extra $5,000–$12,500 at closing.
Get pre-approved first, then go house hunting. A pre-approval is a letter from a bank saying how much they are willing to lend you. It makes sellers take you more seriously — and it stops you from falling in love with a home you cannot actually afford.
Do not make big money moves before you close. Once you apply for a mortgage, avoid changing jobs, buying a new car, or taking on any new debt. Banks will check your finances again right before the deal is done — and surprises can delay or cancel your purchase.
Taking time to plan carefully before buying puts you in control of one of life's most important milestones. Good luck with your home search! 🏡