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Home affordability calculator

How much house fits your income, and which limit sets the price.

Reviewed by Victor Yuki Matusita on . First published .

Your numbers stay on your device
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Home price you can afford

$323,460

Under the 28% housing limit, your housing costs can be $2,216.66 a month: $1,791.66 of principal and interest, the rest taxes, insurance and HOA. That pays for a loan of $283,460.

  • Loan $283,460 · 44%
  • Interest $361,537 · 56%

Loan term, home costs and limits

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Housing costs over gross monthly income; 28% is a common rule of thumb.

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All debts over gross monthly income; 36% is a common rule of thumb.

Housing limit, 28%
Room for housing
$2,216.66
Total debt limit, 36%
Room for housing
$2,400.00

The housing limit leaves less room, so it sets the price.

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Schedule of the largest loan

How to use the home affordability calculator

  1. Enter your yearly income before taxes and what you pay a month on other debts: car, student loans and card minimums.
  2. Add your down payment, the rate and the loan term.
  3. Fill in the yearly property tax and insurance and any HOA dues for the kind of home you want.
  4. Change the two limits to match your lender, and read which one sets the price.

How the price is worked out

The formula

Housing room = income ÷ 12 × housing limit. Debt room = income ÷ 12 × total debt limit − other debts. The smaller of the two is what the home may cost a month.

Taking out a twelfth of the yearly tax and insurance and the HOA dues leaves the principal and interest payment M. The largest loan is L = M × (1 − (1 + r)^−n) ÷ r, with r the yearly rate divided by 12 and n the number of months. The price is that loan plus your down payment.

Assumptions

  • The housing limit applies to principal, interest, property tax, insurance and HOA; the total debt limit adds your other monthly debts. Both are shares of your gross monthly income, rounded down to the cent.
  • The 28% and 36% that the calculator starts with are common rules of thumb, not a rule of law: each lender and loan program sets its own limits.
  • The largest loan is the one whose payment fits what is left after taxes, insurance and HOA, at a fixed rate with monthly payments, rounded down to the cent.
  • No PMI, closing costs or cash reserves are included.

Worked example

This is the example the calculator opens with, worked out by the same engine you use above.

You enter
Gross yearly income$95,000.00
Monthly debts$450.00
Down payment$40,000.00
Rate6.5%
Loan term30 years
Property tax per year$3,600.00
Home insurance per year$1,500.00
HOA dues per month$0.00
Housing limit28%
Total debt limit36%
You get
Home price you can afford$323,459.99
Largest loan$283,459.99
Housing costs per month$2,216.66
Principal and interest$1,791.66
Housing limit, 28%$2,216.66
Total debt limit, 36%$2,400.00

Under the 28% housing limit, your housing costs can be $2,216.66 a month: $1,791.66 of principal and interest, the rest taxes, insurance and HOA. That pays for a loan of $283,460.

Sources

Educational tool

This calculator is an educational tool, not financial advice and not a loan approval. Your lender decides how much it will lend you.

Questions about home affordability

Where do 28% and 36% come from?

They are common rules of thumb for the housing share and the total debt share of gross monthly income. The CFPB explains that different loan products and lenders set different limits, so change the two fields to match yours.

Why is the price lower than a lender said?

A lender may allow a higher total debt share, count income differently or leave taxes out of its first estimate. The calculator only shows what the limits you enter allow.

Which limit matters for me?

The one that leaves less room. With few other debts the housing limit usually sets the price; with a car loan or student loans, the total debt limit often does. The two cards under the result show both.

Is the most I can afford what I should spend?

Not always. The limits leave out savings, child care and repairs. The CFPB suggests building a monthly budget before you choose a price.

Privacy

Your numbers stay on your device. The calculator runs in your browser, so nothing you type is sent anywhere, and the link you copy keeps the numbers after the #, a part of the address your browser never sends.