How Much House Can I Afford?

What this estimate assumes

• It uses the standard 28%/36% front-end/back-end debt-to-income guidelines that most conventional mortgage lenders apply: housing costs alone capped at 28% of gross monthly income, and total debt payments (housing plus everything else) capped at your target debt-to-income percentage.
• It assumes the down payment, interest rate, and loan term you enter are what you'll actually get — your down payment and loan terms as entered, not a lender's final offer.
• It doesn't account for your credit score, which materially affects the interest rate you'd actually qualify for and therefore how much home a given payment supports.
• It doesn't account for closing costs, which are needed on top of your down payment and aren't pulled from the amount you enter here.

How to use this calculator

1. Enter your household's total pre-tax yearly income in Annual gross income ($) — combine incomes if you're buying with a co-borrower.
2. Enter the total of any car loans, student loans, credit cards, or other recurring debt payments in Other monthly debt payments ($). Leave it at 0 if you're debt-free.
3. Enter the cash you have ready to put down in Down payment available ($) — this should be money you actually have, not what you hope to save by closing.
4. Enter the rate you expect to qualify for in Interest rate (APR %). If you don't know your likely rate yet, use current average rates for your credit tier as a starting point.
5. Enter the mortgage length in Loan term (years) — 30 is the most common choice, 15 is the next most common.
6. Enter a rough property tax rate for your area in Annual property tax (% of price). Many U.S. counties fall somewhere between 0.5% and 2.5%; check your target area if you can.
7. Estimate your homeowners insurance plus any HOA dues in Monthly insurance & HOA estimate ($).
8. Adjust Target max debt-to-income (%) if you want a tighter or looser budget than the common 36% guideline — some lenders allow up to 43–50% for strong borrowers, while a more conservative buyer might aim lower.
9. Click Estimate my max home price to see your realistic maximum purchase price and the monthly payment breakdown behind it.

Worked example

Take the calculator's own defaults: $90,000 annual income, $400 in other monthly debts, a $40,000 down payment, a 6.5% rate over a 30-year term, 1.1% property tax, $150/month for insurance and HOA, and a 36% debt-to-income target.

Gross monthly income is $90,000 ÷ 12 = $7,500. The back-end limit — total debt payments at 36% of gross income, minus the $400 already going to other debts — works out to 7,500 × 0.36 − 400 = 2,700 − 400 = $2,300 available for housing. The front-end limit — housing alone at a flat 28% of gross income — works out to 7,500 × 0.28 = $2,100. The calculator takes whichever is smaller, so the binding housing budget here is $2,100, set by the front-end rule rather than the 36% target you entered.

That might seem surprising with so little other debt, but it's exactly why the front-end check exists: the 28% cap doesn't care how much room your other debts leave under the back-end ratio — it applies on its own regardless. With only $400 in other debt, the back-end ratio still had $200 of room left over ($2,300 vs. $2,100) that the front-end rule simply doesn't let you use for housing.

From there, the loan term and rate convert that $2,100/month housing budget into a purchase price. At 6.5% over 30 years, each dollar of loan principal costs about $0.0063207/month in principal and interest (the same payment factor behind this site's mortgage calculator, where a $300,000 loan at this rate works out to roughly $1,896.18/month). Subtracting the $150 insurance/HOA estimate from the $2,100 budget leaves $1,950 for principal, interest, and taxes, and the down payment itself effectively "pre-pays" part of the loan at that same factor: 0.0063207 × $40,000 ≈ $252.83. Adding that back in gives a numerator of 1,950 + 252.83 = $2,202.83.

Property tax adds a second ongoing cost tied to price, at 1.1% ÷ 12 ≈ 0.0009167 of the price per month. Dividing the $2,202.83 numerator by the combined per-dollar cost of principal/interest and tax (0.0063207 + 0.0009167 ≈ 0.0072374) gives a maximum home price of roughly $304,370. Subtracting the $40,000 down payment leaves a maximum loan of about $264,370, with an estimated principal & interest payment of about $1,671/month (0.0063207 × $264,370).

Frequently asked questions

Why does the front-end (28%) ratio sometimes limit me more than the back-end (DTI) ratio?

Lenders check two ratios at once: your total debt payments (including the future mortgage) against your target debt-to-income percentage, and your housing payment alone against a flat 28% of gross income. Whichever one allows the smaller housing payment is the one that actually limits you. If you carry little other debt, the 36% (or whatever target you set) back-end ratio leaves plenty of room, but the 28% front-end cap still applies on its own — so it can end up being the binding constraint even when your overall debt-to-income looks fine.

What if I have no other monthly debts at all?

With zero other debt, your back-end housing room (gross monthly income times your DTI target) gets larger, but the front-end cap of 28% of gross income doesn't move — it's calculated the same way regardless of your other debts. In that case the two ratios get closer together, and which one binds depends on how far above 28% your DTI target is set.

Does this number include closing costs on top of my down payment?

No. This calculator only accounts for the down payment amount you enter being available for the home purchase itself. Closing costs typically run an additional 2–5% of the purchase price and need to be funded separately, whether from savings, a seller credit, or in some cases rolled into the loan. Budget for them before assuming your full down payment amount is available at closing.

How much does my credit score actually change this estimate?

Significantly, because it changes the interest rate you'd actually qualify for, and rate has a large effect on how much home a given monthly payment supports. This calculator uses the rate you enter as a given; it doesn't estimate what rate your credit profile would get you. Run the numbers again with a higher or lower rate to see how sensitive your max price is to the rate you end up qualifying for.

Why isn't PMI (private mortgage insurance) included in this estimate?

This calculator folds your insurance and HOA estimate into one field and doesn't separately model PMI, which typically applies when a down payment is below 20% of the purchase price. If your down payment will be under 20%, add a rough PMI estimate (often 0.3%–1.5% of the loan amount per year) into your monthly insurance & HOA field to get a more realistic number.

How is this different from a lender's official pre-approval?

A pre-approval pulls your actual credit report, verifies your income and assets with documentation, and applies that specific lender's underwriting rules, which can differ from the general 28%/36% guidelines used here. This calculator is a planning estimate to use before you talk to a lender — useful for narrowing your search range, but not a substitute for an actual pre-approval letter.