House Affordability Calculator
Find out the maximum home price you can comfortably afford based on your income, debts, down payment, and the standard 28/36 DTI lending guidelines.
How Much House Can You Afford?
🏠 Your Home Affordability
📊 Monthly Payment Breakdown
📈 Debt-to-Income Ratios
⚠️ Rate Stress Test — What If Rates Change?
| Rate | Max Home Price | Monthly P&I | Total PITI | Δ from Current |
|---|
Understanding Home Affordability
Lenders use Debt-to-Income (DTI) ratios to determine how much mortgage you qualify for. The widely-used 28/36 rule sets two thresholds:
- Front-End Ratio (28%): Your total monthly housing costs — principal, interest, taxes, insurance (PITI), PMI, and HOA — should not exceed 28% of gross monthly income.
- Back-End Ratio (36%): Your total monthly debts (housing + car loans + student loans + credit cards + etc.) should not exceed 36% of gross monthly income.
This calculator finds the lower of the two limits — the binding constraint — to determine your maximum affordable home price. Some lenders allow higher DTIs (up to 43%–50% for FHA/VA loans), but the 28/36 rule is the conservative, widely-recommended standard.
The 28/36 Rule Explained
The calculator works backwards from these constraints — given your income, debts, rates, taxes, and insurance, it computes the maximum loan (and therefore home price) that keeps both DTIs under their limits.
Tips to Maximize What You Can Afford
- Pay down existing debts first. Lower monthly debts directly increase the back-end headroom, often raising your max home price by tens of thousands.
- Boost your down payment. A larger down payment means a smaller loan — and eliminating PMI at 20% saves hundreds per month.
- Shop for lower rates. Even a 0.25% rate reduction can add $10,000+ to your buying power. Compare multiple lenders.
- Consider a 15-year mortgage. The monthly payment is higher, but you’ll save enormously on total interest and build equity faster.
- Look at total cost, not just price. High-tax areas (NJ, IL, TX) have much higher monthly costs than low-tax areas at the same price point.
- Build an emergency fund separate from your down payment. Lenders like to see 3–6 months of reserves.
House Affordability FAQ
What is PITI?
+PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment. Lenders evaluate your PITI (plus PMI and HOA) as a percentage of your gross income to determine affordability.
What if my DTI is above 36%?
+You may still qualify for certain loan programs. FHA loans allow back-end DTIs up to 43% (or even 50% with compensating factors). VA loans have no official front-end limit. However, higher DTI means tighter finances and less room for emergencies. Financial advisors generally recommend staying at or below 36%.
When does PMI go away?
+For conventional loans, you can request PMI removal once you reach 20% equity (80% LTV). Your lender must automatically cancel PMI when you reach 22% equity. FHA loans with less than 10% down require mortgage insurance for the life of the loan — you’d need to refinance into a conventional loan to remove it.
Should I put down 20%?
+Putting 20% down avoids PMI and gives you instant equity, but it’s not required. Many buyers put down 3%–10%. The trade-off is higher monthly payments (PMI + larger loan). Use this calculator to compare scenarios — try different down payment amounts and see how PMI affects your monthly budget.
Does this include closing costs?
+No. Closing costs (typically 2%–5% of the home price) are separate one-time expenses. Budget for these on top of your down payment. They include appraisal fees, title insurance, origination fees, attorney costs, and prepaid taxes/insurance. Ask lenders for a Loan Estimate to see specific costs.
What debts count toward DTI?
+Lenders count all recurring monthly obligations that appear on your credit report: auto loans, student loans, credit card minimum payments, personal loans, child support, and alimony. They do not count utilities, groceries, cell phone bills, subscriptions, or insurance premiums (other than homeowner’s insurance).