FinanceCalcs
Mortgage Affordability Calculator
Find out how much house you can afford based on your income, existing debts, and down payment — with a DTI-based maximum home price, estimated monthly payment breakdown, and affordability chart.
Uses front-end and back-end debt-to-income ratios — the same method lenders use to determine your borrowing limit.
Mortgage Affordability Calculator
Max Home Price: $0
- P&I Payment
- Housing Costs
- Other Debts
"Buy land, they're not making it anymore."
— Mark Twain
How mortgage affordability is calculated
Lenders use two primary debt-to-income ratios to determine how much you can borrow. The front-end ratio (housing ratio) compares your total monthly housing costs — principal, interest, taxes, insurance, and HOA — to your gross monthly income. Most conventional lenders prefer this at or below 28%.
The back-end ratio compares all monthly debt payments (housing plus car loans, student loans, credit cards, and other obligations) to gross monthly income. Conventional loans typically require this below 36–43%; FHA loans may allow up to 50% with compensating factors such as strong credit or significant reserves.
This calculator works backward from your selected DTI target: it determines the maximum monthly payment available for principal and interest after subtracting your existing debts and housing costs, then uses that payment to solve for the maximum loan amount and home price you can afford.
lightbulb Example Affordability Scenario
Suppose your combined gross monthly income is $9,000, you have $800/month in existing debt payments, and you plan a 10% down payment at a 7% mortgage rate with a 43% back-end DTI target.
Your maximum total monthly debt is $9,000 × 43% = $3,870. After subtracting your $800 in existing debts, you have $3,070 available for housing costs. After estimated taxes, insurance, and PMI, your available principal-and-interest payment might be roughly $2,400/month.
At 7% over 30 years, a $2,400 P&I payment supports a loan of approximately $360,000 — and with 10% down, a maximum home price of roughly $400,000.
Many buyers use a mortgage affordability calculator before starting their home search to set a realistic price range, understand how debts affect borrowing power, and prepare for conversations with lenders.
Mortgage Affordability Calculator FAQs
How much house can I afford on my salary?
A common rule of thumb is that your home price should not exceed 3–5 times your annual gross income, but the more precise answer depends on your debt load, down payment, interest rate, and local property taxes. Lenders focus on DTI rather than income multiples, so use this calculator with your actual numbers for a more accurate estimate.
Does a larger down payment help affordability?
Yes, in two ways. A larger down payment reduces the loan amount, which lowers the monthly P&I payment and allows you to afford a higher-priced home within the same DTI limit. It also eliminates PMI once you reach 20% down, further reducing your monthly housing cost.
What is the difference between pre-qualification and pre-approval?
Pre-qualification is an informal estimate based on self-reported figures — useful for budgeting but carries little weight with sellers. Pre-approval involves a hard credit pull and verified income and asset documentation, and is what most sellers require before accepting an offer in competitive markets.
How do existing debts affect how much I can borrow?
Every dollar of existing monthly debt payment (car loan, student loan, credit card minimum) directly reduces the amount available for a mortgage within your DTI limit. Paying off a $400/month car loan before applying, for example, could increase your affordable home price by $50,000 or more at current rates.
Affordability terminology
Debt-to-Income Ratio (DTI)
Total monthly debt payments divided by gross monthly income. The single most important metric lenders use to determine how much you can borrow — typically capped at 36–43% for conventional loans.
Front-End Ratio
Monthly housing costs (principal, interest, taxes, insurance, and HOA) divided by gross monthly income. Also called the housing ratio. Most conventional lenders prefer this at or below 28%.
Back-End Ratio
All monthly debts — housing plus all other debt payments — divided by gross monthly income. This is what most people mean when they say "DTI." Conventional lenders cap this at 36–43%.
Pre-Approval vs. Pre-Qualification
Pre-qualification is an informal estimate based on self-reported figures. Pre-approval involves a hard credit pull and verified income and asset documentation — the level sellers actually require in competitive markets.
PMI (Private Mortgage Insurance)
Required when your down payment is less than 20% of the home price. Typically costs 0.5–1.5% of the loan amount annually and can be cancelled once you reach 20% equity in the home.
Disclaimer: All calculators on this site are provided for informational and educational purposes only. Results are estimates based on the inputs you provide and mathematical formulas — they do not account for taxes, fees, inflation, risk, or other real-world factors that may affect financial outcomes. Past performance does not guarantee future results. Nothing on this site constitutes financial, investment, legal, or tax advice. Always consult a qualified professional before making financial decisions.
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