Skip to content
DayUtils

How Much House Can I Afford? Home Affordability Calculator

Find the highest home price your income can support. Enter your income, monthly debts, down payment and rate, and the calculator applies the 28/36 debt-to-income rule that many lenders use to show your price range and monthly payment.

Loading tool…

How to use the affordability calculator

  1. Enter your gross yearly household income (before tax).
  2. Enter your monthly debt payments — car, student loan and card minimums.
  3. Enter the down payment you have saved.
  4. Enter the interest rate and loan term you expect.
  5. Set yearly property tax and insurance as a percentage of the price (1% to 2% is typical in the US).
  6. Keep the 28% and 36% limits, or change them to match your lender.

The result is the most expensive home where both limits are met, plus the monthly payment split into principal and interest, and tax and insurance.

How it works

The calculator finds your maximum housing payment:

Max payment = lower of (income ÷ 12 × 28%) and (income ÷ 12 × 36% − debts)

Then it solves for the price where the mortgage payment on (price − down payment), plus yearly tax and insurance on the price, equals that maximum.

Worked example

  • Income $100,000 a year → $8,333 a month
  • 28% housing limit = $2,333; 36% total limit = $3,000 − $500 debts = $2,500
  • The lower one, $2,333, sets the budget
  • At 6.5% for 30 years with $60,000 down and 1.5% tax and insurance: home price ≈ $358,300, loan ≈ $298,300, principal and interest ≈ $1,885 and tax and insurance ≈ $448 a month

How to afford more (safely)

  • Pay down debts before applying — every $100 a month less debt raises the back-end limit.
  • Save a bigger down payment.
  • Shop around for a lower rate.
  • Look at areas with lower property tax.
  • Keep a cushion. Owning a home brings repairs and maintenance, often 1% or more of the price each year.

The affordability numbers aren’t everything

Lenders also look at your credit score, job history and cash reserves. Your own budget matters most: childcare, retirement saving and travel aren’t in a debt-to-income ratio. Once you have a price in mind, model the full payment with the mortgage calculator, see if buying beats renting with the rent vs buy calculator, and plan your deposit with the savings goal calculator. This is an estimate, not a loan offer — see our disclaimer.

Frequently asked questions

What is the 28/36 rule?

A common lending guideline: your housing costs (mortgage, property tax and insurance) should be no more than 28% of your gross monthly income, and all debt payments together no more than 36%. Some loan programmes allow higher ratios, such as 31/43 for FHA loans.

How much house can I afford on $100,000 a year?

With $500 of monthly debts, $60,000 down, a 6.5% 30-year rate and 1.5% a year for tax and insurance, the 28% limit gives a housing payment of about $2,333 a month and a home price of roughly $358,000.

Does the calculator use gross or net income?

Gross income — your pay before tax — because that is what lenders use for debt-to-income ratios. Your own budget should also check that the payment fits your take-home pay.

Which debts should I include?

Minimum monthly payments on car loans, student loans, credit cards, personal loans and child support. Don’t include rent you’ll stop paying, utilities, phone bills or groceries.

Why is the result lower than what a lender approved?

Lenders may allow higher ratios than 28/36. Being approved for a loan doesn’t mean the payment is comfortable. This calculator leans to a cautious figure; you can raise the ratios to see a lender’s maximum.

Does a bigger down payment help?

Yes, twice over: each extra dollar down adds a dollar to the price you can afford, and putting 20% down on a conventional loan avoids PMI, which frees more of your budget for the loan itself.

Related tools

Last updated: