Mortgage Affordability Calculator
Estimate the maximum home price you can afford using the 28/36 lender rules, your income, debts, down payment, rate, and term.
How to use this tool
- Enter your gross (pre-tax) monthly income for all borrowers.
- Add up your other monthly debt payments (cars, student loans, card minimums).
- Enter your planned down payment, expected rate, and loan term.
- Adjust the front/back ratios if you want a more or less conservative budget.
- Read the maximum home price, loan amount, and monthly payment budget.
Find a realistic home-shopping budget. This calculator applies the 28/36 lender rules to your income and debts, then converts the affordable payment into a maximum loan and home price.
Formula
The affordable monthly payment is the tighter of the two lender ratios:
Payment = min( Income × Front% , Income × Back% − OtherDebt )
That payment is converted to a loan principal with the present-value-of-an-annuity formula, where r is the monthly rate (annual ÷ 12) and n the number of months:
Loan = Payment × [ 1 − (1 + r)−n ] ÷ r
Max home price = Loan + Down payment
How it works
Mortgage underwriters size a loan around two debt-to-income ratios. The front-end (housing) ratio caps how much of your gross income can go toward the mortgage payment alone; the back-end ratio caps your total debt load including the new mortgage. The classic guideline is 28/36, though many programs allow higher back-end ratios for strong applicants.
This tool takes the smaller of the two caps as your safe monthly payment, then works backward to the loan principal that payment can service over your term and rate. Adding your down payment gives the maximum home price.
The estimate covers principal and interest only. Property taxes, homeowners insurance, HOA dues, and PMI also count toward the housing ratio, so treat the result as an upper bound and leave room for those escrow items. Use it to set a realistic search range before talking to a lender — not as a pre-approval.
Worked example
$10,000/mo income, 6% rate, 30-year loan
- Front-end cap = $10,000 × 28% = $2,800.
- Back-end cap = $10,000 × 36% − $1,000 other debt = $3,600 − $1,000 = $2,600.
- Affordable payment = min($2,800, $2,600) = $2,600 (the back-end rule binds).
- Monthly rate r = 6% ÷ 12 = 0.005; months n = 30 × 12 = 360.
- Loan = 2600 × [1 − (1.005)−360] ÷ 0.005 = $433,658.20.
- Max home price = $433,658.20 + $50,000 down = $483,658.20.
Max monthly P&I $2,600 | Max loan $433,658.20 | Max home price $483,658.20
Maximum 30-year loan by monthly P&I budget and rate
| Monthly P&I budget | At 5% | At 6% | At 7% |
|---|---|---|---|
| $1,400 | $260,794 | $233,508 | $210,431 |
| $2,000 | $372,563 | $333,583 | $300,615 |
| $2,600 | $484,332 | $433,658 | $390,800 |
| $3,200 | $596,101 | $533,733 | $480,984 |
Key terms
- Front-end ratio
- The percentage of gross monthly income spent on housing costs. Lenders commonly cap it near 28%.
- Back-end ratio (DTI)
- The percentage of gross monthly income spent on ALL recurring debt, including the new mortgage. Often capped near 36%, up to 43% for a Qualified Mortgage.
- Principal and interest (P&I)
- The portion of a mortgage payment that repays the loan balance plus the interest charged — it excludes taxes, insurance, and HOA fees.
- Present value of an annuity
- The math that converts a stream of equal future payments into the single loan amount they can support today, given an interest rate.
Frequently asked questions
- How much house can I afford on my salary?
- A common rule of thumb is that your home price can be 3–5x your gross annual income, but the precise answer depends on your other debts, down payment, interest rate, and loan term. This calculator computes it from the 28/36 lender ratios rather than a flat multiple.
- What is the 28/36 rule?
- Spend no more than 28% of gross monthly income on housing (front-end ratio) and no more than 36% on total debt including the mortgage (back-end ratio). It is the traditional affordability guideline used by underwriters.
- Does this include taxes and insurance?
- No — the result is principal and interest only. Property taxes, homeowners insurance, PMI, and HOA dues also count toward the housing ratio, so your true affordable loan is somewhat lower. Budget for those escrow costs.