Home Affordability Calculator — Find Your Maximum Home Purchase Price
Find out how much house you can afford
Car loans, student loans, credit cards
How to use Home Affordability Calculator
Free home affordability calculator using the 28/36 rule. Enter income, debts, down payment, and rate to find the maximum home price you can afford and cash needed to close.
A home affordability calculator tells you how much house you can afford based on your income, existing debts, down payment, and current mortgage rates. Most lenders use the 28/36 rule: your housing costs should not exceed 28% of gross monthly income, and total debt payments should not exceed 36%. Knowing your number before you start house hunting prevents falling in love with a home outside your budget — and gives you a concrete target when saving for a down payment.
How to use this Home Affordability Calculator
- 1Enter your gross annual income (before taxes). If buying with a partner, enter combined household income.
- 2Enter your monthly debt payments — car loans, student loans, credit card minimums. Do not include current rent.
- 3Enter your planned down payment amount or percentage.
- 4Enter the current mortgage interest rate and your expected loan term (typically 30 years).
- 5The calculator applies the 28/36 rule and shows your maximum home price, estimated monthly payment, and how much you need in cash to close.
How much house can I afford — the 28/36 rule explained
Lenders use two debt-to-income (DTI) ratios to qualify buyers. The front-end ratio caps housing costs at 28% of gross monthly income. The back-end ratio caps all monthly debt payments at 36%. Your maximum home price is determined by whichever limit is reached first.
| Variable | Meaning |
|---|---|
| Front-end DTI | Housing costs ÷ gross monthly income ≤ 28% |
| Back-end DTI | (Housing + all debts) ÷ gross monthly income ≤ 36% |
| Housing costs | Principal + Interest + Property Tax + Insurance (PITI) |
| Max home price | Derived by working backwards from the maximum monthly payment |
| Cash needed | Down payment + closing costs (2–5% of loan) + reserves |
Home buying calculator example: $95,000 household income, $500/month existing debts
- 01Gross monthly income: $95,000 ÷ 12 = $7,917.
- 02Front-end limit (28%): $7,917 × 28% = $2,217/month maximum housing payment.
- 03Back-end limit (36%): $7,917 × 36% = $2,850. Minus existing debts $500 = $2,350 available for housing.
- 04Binding constraint: $2,217 (front-end is lower). At 7% rate, 30-year term, 10% down: max loan ≈ $334,000.
- 05Max home price: $334,000 ÷ 0.90 (90% loan) = $371,000. Cash needed: $37,100 down + ~$10,000 closing costs = ~$47,100.
Result
Maximum home price: approximately $371,000. Monthly payment (PITI): ~$2,217. Cash needed to close: ~$47,100.
What affects how much house you can afford?
Gross income
Lenders use gross (pre-tax) income. A household earning $100,000 gross typically qualifies for a home in the $350,000–$450,000 range depending on debts, rate, and down payment.
Existing debt
Every $100/month in existing debt payments reduces your home buying power by approximately $12,000–$15,000. Paying off a car loan before buying can significantly increase your budget.
Down payment
A larger down payment reduces your loan amount, eliminates PMI at 20%+, and lowers your monthly payment. It also signals financial strength to lenders.
Interest rate
At 6% vs 7%, the same $300,000 loan has a $180/month lower payment — which translates to roughly $25,000 more buying power.
Property taxes and insurance
These are included in PITI and reduce how much principal and interest you can carry. High-tax areas like NJ or IL can reduce buying power by $30,000–$50,000 vs low-tax states.
Credit score
A 760+ score qualifies for the best rates. Each 20-point drop below 760 can add 0.1–0.25% to your rate and directly reduces the home price you qualify for.
Tips and things to know
- ✓Lenders pre-approve up to the 36% back-end DTI limit — but just because you qualify does not mean you should borrow the maximum.
- ✓The 28/36 rule is a lender qualification standard, not a lifestyle recommendation. Many financial planners suggest keeping housing at 20–25% of take-home pay.
- ✓Get pre-approved before house hunting — it reveals the exact loan amount you qualify for and strengthens your offer in competitive markets.
- ✓Closing costs (2–5% of the loan) are often overlooked. Budget $8,000–$15,000 in closing costs on a $300,000 home, on top of your down payment.
- ✓FHA loans allow back-end DTI up to 43–57% with compensating factors — but the higher payment may strain your monthly budget even if you qualify.
Official resources and further reading
CFPB — How Much Home Can You Afford?
CFPB's homebuying preparation guide covering income requirements, debt-to-income ratios, and getting mortgage-ready.
HUD — FHA Loan Requirements
Official HUD guide to FHA loan requirements including down payment minimums, DTI limits, and mortgage insurance premiums.
Consumer Financial Protection Bureau — Mortgage Shopping Worksheet
CFPB comparison tool for different mortgage types — conventional, FHA, VA, and USDA — with requirements and trade-offs explained.
Related tools you might need
Frequently asked questions
Spend no more than 28% of gross monthly income on housing costs, and no more than 36% on total debt payments (housing + car + student loans + credit cards).