Home Affordability Calculator
Estimate the maximum home price you can afford based on your income, debts, and down payment.
How is home affordability calculated?
Lenders commonly use the 28/36 rule to gauge how much home you can afford. Your total housing payment generally shouldn't exceed 28% of your gross monthly income, and your total debt payments (including housing) shouldn't exceed 36%. This calculator applies whichever limit is more restrictive, then works backward through the mortgage math to estimate a maximum home price, accounting for an estimated cost of property taxes and homeowners insurance.
Why does the estimate use an iterative calculation?
Property taxes and insurance are usually estimated as a percentage of the home's price, but the home price is exactly what we're trying to find. To solve this, the calculator makes an initial guess, estimates taxes and insurance from that guess, refines the budget available for principal and interest, and repeats the process a few times until the numbers settle on a stable, realistic answer.
Tips for improving what you can afford
Paying down existing debt, saving a larger down payment, or locking in a lower interest rate can meaningfully raise your affordable home price. Extending your loan term lowers the monthly payment but increases total interest paid over time, so it's worth weighing both the monthly budget and the long-term cost before deciding.
Frequently Asked Questions
What is the 28/36 rule?
The 28/36 rule is a lending guideline stating your housing payment shouldn't exceed 28% of your gross monthly income, and your total debt payments (housing plus other debts like car loans and student loans) shouldn't exceed 36%. Lenders use whichever limit is more restrictive to figure out your maximum affordable payment.
How much house can I afford on my salary?
A common rule of thumb is that your home price should be roughly 3 to 5 times your gross annual income, but the real answer depends on your down payment, existing debts, interest rate, and loan term. Enter your own numbers above for a more precise, personalized estimate than a flat multiplier.
How does a bigger down payment change how much home I can afford?
A larger down payment directly increases your maximum home price since it reduces the loan amount needed for the same monthly payment budget. It can also help you avoid private mortgage insurance (typically required below 20% down) and may qualify you for a better interest rate, both of which stretch your buying power further.
How does debt-to-income ratio affect mortgage approval?
Lenders add up all your monthly debt payments, including the proposed mortgage, and divide by your gross monthly income to get your debt-to-income (DTI) ratio. Most conventional loans cap DTI around 36-43%, so existing debts like car loans, student loans, and credit cards directly reduce the maximum mortgage you can qualify for.
What's the difference between pre-qualification and pre-approval?
Pre-qualification is a quick, informal estimate based on self-reported financial information and isn't verified by the lender. Pre-approval involves a full application with documentation and a credit check, resulting in a conditional commitment for a specific loan amount — sellers take pre-approval much more seriously when you make an offer.
Do student loans or car payments reduce how much house I can afford?
Yes — any recurring monthly debt obligation counts toward your debt-to-income ratio and directly lowers the mortgage payment a lender will approve. Paying down or paying off a car loan or student loan balance before applying can meaningfully increase your affordable home price.
What should first-time homebuyers know about affordability?
First-time buyers should budget for more than just the mortgage payment — property taxes, homeowners insurance, and maintenance add up quickly, and many first-time buyer loan programs allow down payments as low as 3%. Getting pre-approved early helps you understand your realistic budget before you start house hunting.
How can I increase how much house I can afford?
The most effective levers are paying down existing debt to lower your DTI ratio, saving a larger down payment to shrink the loan you need, improving your credit score to qualify for a better interest rate, and considering a longer loan term to lower the monthly payment (though this increases total interest paid).