House affordability calculator
Enter your yearly income, monthly debts, down payment, rate, loan term, property tax and insurance. With the debt-to-income limits you choose, the calculator finds the highest home price whose monthly housing cost fits, and which limit decides it.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Enter your income, the monthly debts you already pay and the down payment.
- Enter the interest rate, the term and the yearly property tax and insurance.
- Keep the limits, or type the ones your lender uses.
How it works
Monthly income is the yearly income divided by 12. The housing budget is the smaller of the housing limit times monthly income and the total debt limit times monthly income minus your debts. The monthly cost of a price P is the mortgage payment on P minus the down payment (level payments, as in the mortgage calculator), plus property tax of P × tax rate ÷ 12, plus insurance ÷ 12 and fees. The calculator solves for the P that makes this cost equal to the budget.
Worked example
Income 90,000 a year is 7,500 a month. With debts of 500, the housing limit of 28% gives 2,100, and the total debt limit of 36% gives 2,700 − 500 = 2,200, so the housing limit decides: 2,100 a month. With a down payment of 40,000, 6.5% for 30 years, 1.2% property tax and 1,400 a year insurance, the affordable price is about 305,458, with a loan of 265,458 and a mortgage payment of 1,677.88.
Tips
- Try your lender’s real limits and a rate a little higher than today’s.
- A lower price than the result leaves room for repairs and savings.
Frequently asked questions
How does the calculator find the price?
It takes the smaller of two monthly limits, a share of gross income for housing, and a larger share for all debts minus your other debts. Then it solves for the price whose mortgage payment, tax, insurance and fees equal that amount.
What are the 28 and 36 numbers?
They are a commonly used lender guideline, often called the 28/36 rule. Housing costs should stay under about 28 percent of gross income and all debt under about 36 percent. Lenders and loan types use different limits, so change the fields to match yours.
Is the down payment part of the price?
Yes. The loan is the price minus the down payment, so a larger down payment raises the price you can afford for the same monthly cost.
What is not included?
Closing costs, maintenance, mortgage insurance and utilities are not counted. A low down payment may add mortgage insurance, which would lower the affordable price.