House Affordability Calculator
Determine how much house you can afford based on your income and expenses with comprehensive analysis including debt-to-income ratios and down payment requirements
Calculation Method
Income & Debt Information
Housing costs as % of gross income (typically 28%)
Total debt as % of gross income (typically 36%)
Loan & Property Details
Enter your information to see how much house you can afford
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Determining how much house you can afford depends on several key factors including your income, existing debts, down payment, and the current mortgage rates. Lenders typically use two main ratios to evaluate your affordability:
- Front-End Ratio (28% Rule):Your total housing costs should not exceed 28% of your gross monthly income
- Back-End Ratio (36% Rule):Your total debt payments should not exceed 36% of your gross monthly income
1. Monthly Income Calculation
Monthly Income = Annual Income ÷ 12
2. DTI Ratio Limits
Front-End Max = Monthly Income × Front-End Ratio
Back-End Max = (Monthly Income × Back-End Ratio) - Monthly Debts
3. Housing Budget
Max Housing Budget = min(Front-End Max, Back-End Max)
4. Monthly Mortgage Payment
M = L × [r(1+r)^n] / [(1+r)^n - 1]
Where: L = Loan Amount, r = Monthly Rate, n = Number of Payments
5. Total Housing Cost
Total = Mortgage + Property Tax + Insurance + HOA
Example 1: Income-Based Calculation
Scenario:$100,000 annual income, $500 monthly debts, 30-year mortgage at 6%, 20% down payment
Calculation:Monthly income = $8,333, Front-end max = $2,333, Back-end max = $2,500
Result:Max housing budget = $2,333, Affordable house ≈ $420,000
Example 2: Budget-Based Calculation
Scenario:Fixed budget of $2,500/month, same loan parameters as above
Calculation:Housing budget = $2,500 (user-defined)
Result:Affordable house ≈ $390,000
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How to Use This Calculator
Step-by-step guide to get accurate results