Home Affordability Calculator
Determine how much house you can afford based on your income, existing debts, down payment, and current mortgage rates. Get a realistic home price range.
Parameters
Results Summary
This calculator determines the results based on the following standard financial formula for Affordability Calculation:
Variables Glossary
- Affordable Home Price
- Maximum home price based on your income and debts
- Down Payment
- Required down payment amount
- Loan Amount
- Mortgage amount after down payment
- Monthly Payment
- Estimated monthly mortgage payment (PITI)
The calculator uses the 28/36 rule. 28% of gross monthly income for housing costs, and 36% for total debt. The affordable price is derived by back-calculating from the maximum allowable monthly payment including taxes and insurance.
What is the 28/36 rule in home affordability?
The 28/36 rule states that your housing expenses should not exceed 28% of your gross monthly income, and total debt payments (including housing) should not exceed 36%. Lenders commonly use these thresholds to determine mortgage eligibility.
What costs are included in the monthly payment?
PITI: Principal (loan repayment), Interest (borrowing cost), Taxes (property tax), and Insurance (homeowners insurance). Some calculators also include PMI (private mortgage insurance) if down payment is less than 20%.