House Affordability Calculator
Estimate how much house you can comfortably afford by adjusting income, debts, rates, taxes, insurance and more. Use the dropdown to switch between a DTI rule-of-thumb or entering a fixed monthly housing budget.
For the DTI method we compute the maximum monthly housing payment using the 28% housing rule and the remaining debt allowance from the 36% total DTI rule, take the smaller of the two, then numerically solve for the maximum house price whose monthly mortgage+tax+insurance+HOA fits that payment (taking the selected down payment into account).
House Affordability Calculator Online – Find Out How Much Home You Can Afford
Intro
Buying a house is one of the biggest financial decisions most people will ever make. A House Affordability Calculator is a free online tool that helps you determine how much house you can afford based on your income, monthly expenses, down payment, and loan details.
Instead of guessing or relying on rough estimates, the House Affordability Calculator online gives you a clear picture of what fits within your budget. Whether you’re a first-time homebuyer or planning to upgrade to a larger home, this tool helps you make informed decisions by balancing your financial situation with mortgage limits.
Formula / Working
The calculator uses standard mortgage affordability guidelines and debt-to-income (DTI) ratios to determine affordability.
Common Rule of Thumb:
- Monthly housing costs should not exceed 28–30% of gross monthly income.
- Total debt payments (including mortgage, car loans, credit cards, etc.) should not exceed 36–40% of gross monthly income.
Mortgage Payment Formula:
M=P×r(1+r)n(1+r)n−1M = P \times \frac{r(1+r)^n}{(1+r)^n – 1}M=P×(1+r)n−1r(1+r)n
Where:
- M = monthly mortgage payment
- P = principal loan amount (home price – down payment)
- r = monthly interest rate (annual ÷ 12)
- n = total number of payments (loan term × 12)
The calculator combines these rules with your inputs to show the maximum home price you can afford.
Step-by-Step Usage
Using the House Affordability Calculator online is quick and easy:
- Enter your gross monthly income.
- Add your monthly debt payments (loans, credit cards, etc.).
- Input your down payment amount.
- Enter the loan term (years) and interest rate.
- Select your preferred DTI ratio (default 36%).
- Click the Calculate button.
- Instantly see the maximum house price you can afford along with estimated monthly payments.
Examples
Example 1:
- Gross Monthly Income: $6,000
- Monthly Debts: $500
- Down Payment: $50,000
- Loan Term: 30 years
- Interest Rate: 5%
Result: Affordable home price ≈ $280,000
Interpretation: Staying within 30% of income ensures manageable payments.
Example 2:
- Gross Monthly Income: $4,500
- Monthly Debts: $1,000
- Down Payment: $40,000
- Loan Term: 20 years
- Interest Rate: 4.5%
Result: Affordable home price ≈ $190,000
Interpretation: Higher existing debt lowers the affordable house price.
Example 3:
- Gross Monthly Income: $8,000
- Monthly Debts: $500
- Down Payment: $100,000
- Loan Term: 15 years
- Interest Rate: 4%
Result: Affordable home price ≈ $420,000
Interpretation: A large down payment and shorter loan term allow higher affordability.
FAQs
Q1. What is a House Affordability Calculator?
It’s a tool that estimates the maximum home price you can afford based on your income, debt, and mortgage terms.
Q2. How accurate is this calculator?
It provides a reliable estimate using mortgage affordability rules, but actual approval depends on lender policies.
Q3. What percentage of income should go to housing?
Most experts recommend 28–30% of gross monthly income for housing costs.
Q4. Can I include property taxes and insurance?
Yes, some calculators also factor in taxes, HOA fees, and insurance for a more realistic estimate.
Q5. Why is down payment important?
A larger down payment reduces your loan amount, lowers monthly payments, and increases affordability.