Home Affordability Calculator

Find out how much house you can afford based on your income, debts, and down payment. Uses the 28/36 rule and current mortgage rates to calculate your maximum home purchase price.

🏠 Home Finance📐 Max Home Price = (Monthly Budget - Tax - Ins) / [r(1+r)^n/(1+r)^n-1] + Down Payment

Annual gross income ($)

Monthly debt payments ($)

Down payment available ($)

Interest rate (%)

Qualification standard

Please enter valid values.

Formula & Reference

Variable	Formula	Units
Home Affordability Calculator	Max Home Price = (Monthly Budget - Tax - Ins) / [r(1+r)^n/(1+r)^n-1] + Down Payment	$ max price

Step-by-Step Examples

Example 1

$90K Income

$90K income, $500 debt, $50K down, 6.75%, 28/36 rule.

Monthly = $7,500 | Max housing = 28% = $2,100/mo
Less est. taxes + ins ($400): $1,700 P&I budget
Max loan = ~$254K | + $50K down = $304K home

✓ ~$304,000 max home price

Example 2

FHA Buyer

$60K income, $200 debt, $10K down, 6.75%, FHA.

Monthly = $5,000 | FHA 43% total DTI = $2,150
Less debt ($200): $1,950 housing budget
Max loan ~$291K + $10K down = $301K

✓ ~$301,000 with FHA (10K down)

Example 3

Dual Income

$150K combined, $800 debt, $80K down, aggressive.

Monthly = $12,500 | 35% = $4,375/mo housing
Max loan ~$650K + $80K = $730K home

✓ ~$730,000 combined income

Real-World Applications

🏠

First-Time Buyers

Set a realistic home purchase budget before starting your search.

💰

Financial Planners

Help clients determine home purchase readiness.

📊

Real Estate Agents

Quickly qualify buyer budget to focus on appropriate price ranges.

🏦

Mortgage Lenders

Pre-qualify buyer budgets efficiently.

Common Mistakes to Avoid

⚠️

Qualifying for more than is comfortable

Lenders approve the maximum they'll allow, not what's financially healthy. Qualify for what you CAN afford, then choose what you SHOULD afford. PITI under 25% of gross income allows financial breathing room.

⚠️

Not factoring in maintenance costs

Budget 1-2% of home value annually for maintenance. On a $300K home, that's $3,000-$6,000/year. This is in addition to mortgage, taxes, and insurance.

⚠️

Forgetting moving, furnishing, and closing costs

Closing costs: 2-5% of loan ($6,000-$15,000 on a $300K purchase). Moving: $1,000-$5,000. Immediate repairs and furnishing: $5,000-$20,000. Budget for these beyond just the down payment.

Frequently Asked Questions

How much house can I afford with a $60,000 salary? ▾

At $60K/year and 6.75% rate with 20% down: approximately $200K-$240K home price using the 28% rule. Monthly payment around $1,400 on a $200K home at 6.75%.

What is the 28/36 rule? ▾

Housing costs (PITI) should not exceed 28% of gross monthly income. Total monthly debt (housing + car + student loans + other) should not exceed 36%. These are traditional lender guidelines for sustainable debt levels.

What credit score do I need to buy a house? ▾

Conventional loans: 620 minimum, 740+ for best rates. FHA: 580 minimum with 3.5% down, 500 with 10% down. VA/USDA: typically 620+. Higher credit scores mean lower rates and potentially thousands in savings.

How much should I save before buying a house? ▾

Down payment (3-20%+ of purchase price) + closing costs (2-5%) + emergency fund (3-6 months expenses). For a $300K home: $9,000-$60,000 down + $6,000-$15,000 closing = $15,000-$75,000 before buying.

Is now a good time to buy a house? ▾

The right time to buy is when you're financially ready: stable income, good credit, adequate savings, planning to stay 5+ years, and the payment fits your budget. Timing the market rarely works; financial readiness is the better guide.