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Mortgage Affordability Calculator

Get a rough estimate of the home price your income could support, based on your debts, down payment, and the lending ratios you choose. Every assumption is visible and adjustable.

This is an estimate, not a pre-approval. Lenders look at your full financial picture, including credit history, assets, and employment, and each loan program has its own rules. Talk to lenders for an actual pre-approval.

How the estimate is calculated

  1. Monthly income. Annual gross income is divided by 12.
  2. Housing budget from two limits. The calculator finds the housing payment allowed by your housing cost ratio, and the payment allowed by your total debt-to-income ratio after subtracting existing debts. It uses whichever is lower.
  3. Money left for the loan. Monthly property taxes, insurance, and HOA dues are subtracted from the housing budget. What remains is available for principal and interest.
  4. Maximum loan and price. That principal-and-interest amount is converted into a loan amount using your rate and term. Your down payment is added to estimate the home price.

Example: $120,000 household income

Monthly gross income is $10,000. A 28% housing ratio allows $2,800 a month. A 36% total ratio allows $3,600 minus $500 in existing debts, or $3,100. The lower figure, $2,800, becomes the housing budget.

After $550 a month for taxes and insurance, $2,250 is left for principal and interest. At a hypothetical 6.5% for 30 years, that supports a loan of about $355,974. Adding a $60,000 down payment gives an estimated maximum price of about $415,974.

About the default ratios

The defaults of 28% for housing and 36% for total debt are traditional rules of thumb, not universal limits. Lenders and loan programs use different maximums, and some approve higher ratios when other parts of an application are strong. Many households also choose to borrow less than a lender would allow. Change the ratios to see how sensitive the result is.

Important limitations

  • Taxes and insurance are fixed dollar amounts here, but in reality they usually rise with the price of the home.
  • Mortgage insurance is not included. With less than 20% down, PMI or FHA mortgage insurance would lower the affordable price.
  • Closing costs, moving costs, and cash reserves are not included. Make sure you have savings beyond the down payment.
  • The estimate does not consider your credit score, which can affect your rate and eligibility.
Debt-to-income calculatorSee how a specific payment changes your DTI. Payment calculatorEstimate the full payment on a specific home. Home-buying guidesLearn the steps from budgeting to closing.

This calculator provides estimates for educational purposes only. It is not a pre-approval, loan offer, or financial advice. See our disclaimer.