Home Affordability Calculator

Example scenarios

Scenario 1: A couple with combined income evaluates how much home they can afford using lender-style DTI ratios

A couple with combined income evaluates how much home they can afford using lender-style DTI ratios.

Sample inputs

Gross monthly income: $9,500
Monthly debt payments: $650
Down payment saved: $50,000
Interest rate: 6.5%

Sample results

Max housing payment (28%): ~$2,660
Affordable home price: See calculator

Scenario 2: Dual-income household using 28% front-end and 36% back-end DTI guidelines

Dual-income household using 28% front-end and 36% back-end DTI guidelines.

Sample inputs

Gross monthly income: $11,000
Monthly debts: $800
Down payment: $60,000
Interest rate: 6.5%

Sample results

Max housing payment (28%): ~$3,080
Affordable home price: See calculator

Scenario 3: Single buyer with student loans pushing back-end DTI higher

Single buyer with student loans pushing back-end DTI higher.

Sample inputs

Gross monthly income: $6,500
Monthly debts: $650
Down payment: $25,000

Sample results

Back-end DTI headroom: Tighter budget

Decision guide

Affordability calculators apply common DTI guidelines. Your comfortable payment may be below the maximum a lender approves.

Stay conservative when

Income is variable or commission-based.
You expect major expenses (childcare, education, car replacement).
You prefer a larger emergency fund over a bigger home.

You may stretch toward the upper range when

Two stable incomes cover debts with margin to spare.
You have substantial reserves beyond the down payment.
Housing costs are offset by shorter commutes or lower other expenses.

Formula, sources & assumptions

Formula: Derives affordable price from income-based DTI ratios and estimated P&I.

Sources

Common 28/36 DTI guidelines used by many lenders

Key assumptions

Stated rate and term
Taxes and insurance estimated or excluded per inputs

For educational and planning purposes only. Not legal, tax, accounting, or financial advice.

Lenders use debt-to-income ratio to determine how much you can borrow. This calculator estimates the maximum home price you can afford based on your income, existing debt, down payment, and a target DTI limit. Property taxes, homeowners insurance, and HOA fees are not included.

How to use this calculator

Enter your gross monthly income before taxes.
Enter total monthly debt payments (car loans, student loans, credit cards, etc.).
Enter your planned down payment.
Enter the expected mortgage rate and loan term.
Adjust the maximum DTI if needed (36% is a common guideline).
Enter a target home price to compare against your estimated maximum.
Review affordability status, max monthly payment, loan amount, and home price.

Formula

Maximum monthly housing payment is derived from your income and DTI limit minus existing debt. Max loan amount is calculated by inverting the amortization formula, and max home price adds your down payment to the max loan amount. This payment covers principal and interest only—not taxes, insurance, or HOA.

Example

With $8,000 monthly income, $500 in debt, a 36% DTI cap, and a $50,000 down payment at 6.5% over 30 years, you may afford a home priced around $400,000.

Frequently asked questions

What DTI do lenders typically use?

Many conventional lenders prefer a total DTI of 36% or less, though some programs allow up to 43% or higher with strong credit and reserves.

Does this include property taxes, insurance, or HOA?

No. This estimate covers principal and interest only. Budget separately for property taxes, homeowners insurance, HOA fees, and maintenance when planning your purchase.