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Home Affordability Calculator

The most expensive home your income can support.

Introduction

Home Affordability Calculator — The most expensive home your income can support. Enter Gross annual income (before tax), Other monthly debt payments (cards, car, student loans), Mortgage interest rate (% per year), Term (years), Down payment to get an instant, accurate result.

Formula

Rule-of-thumb estimate. Maximum principal-and-interest payment = the smaller of (a) 28% of gross monthly income and (b) 36% of gross monthly income minus your other monthly debt payments. The maximum loan is that payment converted with the standard annuity factor (1 − (1+r)⁻ⁿ) / r, and the estimated maximum home price adds your down payment. If your other debts already use the whole 36%, no payment is available and the calculator says so.

Step-by-step

  1. Enter the Gross annual income (before tax).
  2. Enter the Other monthly debt payments (cards, car, student loans).
  3. Enter the Mortgage interest rate (% per year).
  4. Enter the Term (years).
  5. Enter the Down payment.
  6. Click Calculate to see your result instantly.

Real-world example

Example: With Gross annual income (before tax) = 80000, Other monthly debt payments (cards, car, student loans) = 300, Mortgage interest rate (% per year) = 6.5, Term (years) = 30, Down payment = 40000, the Home Affordability Calculator gives Monthly Housing Limit 28pct: 1866.6667, Monthly Total Debt Limit 36pct: 2400, Limiting Rule: 28% housing limit.

Frequently Asked Questions

Is 28% / 36% a lender rule?
No. It is a commonly cited guideline (housing at most 28% of gross income, housing plus other debts at most 36%). Lenders and loan programs use different limits and also look at credit, savings and the property, so treat the result as a rough estimate, not a loan decision.
Does this include taxes and insurance?
No. The payment is principal and interest only. Property tax, home insurance, PMI and HOA dues are excluded, and they would reduce the price you can truly afford.
What inputs does the Home Affordability Calculator need?
You'll need to provide: Gross annual income (before tax), Other monthly debt payments (cards, car, student loans), Mortgage interest rate (% per year), Term (years), Down payment. All fields use sensible defaults, so you can see a working example immediately and then adjust the values to match your own numbers.
How accurate is the Home Affordability Calculator?
The Home Affordability Calculator applies the formula exactly as calculated — Rule-of-thumb estimate. Maximum principal-and-interest payment = the smaller of (a) 28% of gross monthly income and (b) 36% of gross monthly income minus your other monthly debt payments. The maximum loan is that payment converted with the standard annuity factor (1 − (1+r)⁻ⁿ) / r, and the estimated maximum home price adds your down payment. If your other debts already use the whole 36%, no payment is available and the calculator says so. — so results are precise for the inputs you provide. Accuracy depends on entering correct, realistic input values.
Are these results guaranteed?
No. The Home Affordability Calculator gives an estimate based on the numbers you enter and standard financial formulas — actual rates, fees, taxes, and terms vary by lender, institution, and jurisdiction, and can change over time. This is not financial advice; consult a qualified financial professional for decisions specific to your situation.
Is the Home Affordability Calculator free to use?
Yes, the Home Affordability Calculator is completely free, requires no signup, and runs instantly in your browser.

About the Home Affordability Calculator

The Home Affordability Calculator uses a real, verifiable formula — Rule-of-thumb estimate. Maximum principal-and-interest payment = the smaller of (a) 28% of gross monthly income and (b) 36% of gross monthly income minus your other monthly debt payments. The maximum loan is that payment converted with the standard annuity factor (1 − (1+r)⁻ⁿ) / r, and the estimated maximum home price adds your down payment. If your other debts already use the whole 36%, no payment is available and the calculator says so. — so results are accurate every time, not an approximation.