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House Affordability Calculator
House Affordability
Calculate how much home you can comfortably afford based on your income
$0
Recommended House Price
Based on a 28/36 Debt-to-Income ratio
Monthly P&I
$0
Loan Amount
$0
DTI Ratio
0%
Monthly Budget Allocation
About the House Affordability Calculator
Estimate the home price you can afford using common lender guidelines of 28% of income for housing and 36% for total debt.
How to use the House Affordability Calculator
- Enter your Annual Gross Income, Down Payment and Monthly Debt.
- Enter the expected Interest Rate (%).
- Press Calculate My Budget.
Formula and method
Housing limit = 28% of gross monthly income. Total debt limit = 36% of gross monthly income minus existing debts. The smaller allowed payment sets the maximum loan, and price = loan + down payment.
When to use the House Affordability Calculator
- Finding a sensible price range before you start house hunting.
- Seeing how your income, debts and down payment affect what you can borrow.
- Testing how a higher interest rate changes the price you can afford.
Common mistakes to avoid
- Assuming that the largest loan a lender approves is the amount you can comfortably repay.
- Ignoring costs after the purchase, such as maintenance, utilities and furnishing.
- Forgetting closing costs and the cash needed on moving day.
Tips
- Property tax, insurance and maintenance add to the true monthly cost.
- Lenders may approve more than you should spend. Set a comfortable budget.
Frequently Asked Questions
A guideline that housing costs should be no more than 28 percent of gross income and total debt payments no more than 36 percent.
A guideline that suggests spending no more than about 28% of gross income on housing and no more than 36% on all debt payments combined.
Yes. A better score usually gets a lower rate, which lets you borrow more for the same monthly payment.