Mortgage Affordability Calculator
Work out how much house you can afford — backwards from your income, debts, down payment, rate, and a target debt-to-income ratio to a maximum home price and monthly payment.
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Disclaimer: This free tool is provided “as is,” without warranties of any kind, and is for general informational purposes only — not professional, legal, financial, medical, tax, or engineering advice. Results may contain errors; verify anything important independently and use at your own risk. We accept no liability for any loss or damage arising from its use. See our Terms of Use for details.
Step-by-Step Guide
Enter your gross annual income, your total recurring monthly debt payments (car loans, student loans, minimum credit card payments), your planned down payment, the loan interest rate, the term in years, and your target debt-to-income ratio. The tool inverts the standard amortization formula to calculate the maximum monthly payment you qualify for, then derives the affordable loan amount and adds your down payment to reach the maximum home price.
How the debt-to-income calculation works
Lenders use two DTI thresholds. The front-end ratio limits your total housing costs (principal, interest, property tax, insurance, and HOA — collectively PITI) to a percentage of gross monthly income, typically 28%. The back-end ratio adds all other recurring debts to PITI and limits the combined total to a higher ceiling, often 36% for conventional loans or up to 43–50% for FHA loans. This tool works from whichever limit you choose. If you enter 36%, it subtracts your existing monthly debts from the back-end allowance to find how much is left for housing.
Optional inputs that matter
Property tax, homeowners insurance, and HOA fees come directly out of your PITI budget, reducing the portion available for principal and interest. Even a $300/month HOA shrinks your affordable loan meaningfully. Include these figures for the most realistic estimate. The result is an estimate to help you plan — not a pre-approval from a lender.
$90,000 annual income ($7,500/month gross) with $400 in monthly debts, a $40,000 down payment, a 6.5% rate over 30 years, and a 36% back-end DTI target: the back-end ceiling is $2,700/month; subtract $400 in existing debts and $300 estimated for tax/insurance, leaving roughly $2,000 for principal and interest. Inverting the amortization formula at 6.5% / 30y yields an affordable loan of about $317,000 and a maximum home price near $357,000 with the down payment added.
Who it's for
First-time and move-up home buyers, real estate agents, and mortgage shoppers.
Core Features
- Solves backwards from income, debts, and DTI to a maximum home price.
- Inverts the standard amortization formula to find the affordable loan.
- Factors property tax, insurance, and HOA into the monthly payment.
- Shows a full payment-component breakdown; estimate-only, not a loan offer.
🛡️ No tracking — your inputs, keys, and details never leave this client sandbox.
How does the calculator determine how much house I can afford?
It works backwards from your income and debts rather than forwards from a price. It takes your gross monthly income, multiplies it by your chosen debt-to-income ratio to find the maximum total monthly debt budget, subtracts your existing monthly debt payments to find what's left for housing, then inverts the standard amortization formula to discover the loan principal that produces exactly that monthly payment at your given rate and term. Adding your down payment gives the maximum home price.
What is a debt-to-income ratio and what should mine be?
Your debt-to-income ratio (DTI) is the share of your gross monthly income that goes toward recurring debt payments. The back-end DTI used here includes all debts — housing plus car loans, student loans, credit card minimums, and any other fixed obligations. Conventional lenders typically prefer a back-end DTI at or below 36%; FHA loans may accept up to 43–50% with compensating factors. A lower DTI means you qualify for a larger loan at the same income. Enter 28% if you want to use the front-end (housing-only) limit instead.
What is PITI and why does it reduce my maximum loan?
PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a total monthly housing payment. Property taxes and homeowners insurance are mandatory costs added to your monthly bill, usually collected through an escrow account. An HOA fee is a fifth cost on top. Because all of these come out of the same DTI budget, higher property taxes or a large HOA fee reduce the portion available for principal and interest, which lowers the loan amount the calculator can justify.
How does the down payment affect what I can afford?
The down payment reduces the loan you need to borrow, which directly lowers the monthly principal-and-interest payment at any given rate. A larger down payment also eliminates private mortgage insurance (PMI) on conventional loans when it reaches 20% of the purchase price. In this calculator the down payment is added on top of the affordable loan to reach the maximum home price — so a bigger down payment increases the price ceiling without changing your income or DTI.
Is this a mortgage pre-approval?
No. This is an estimation tool based on the inputs you provide. A real pre-approval involves a credit check, income verification, asset documentation, and a lender underwriting decision. This calculator uses a simplified model — it does not factor in credit score, loan type (conventional, FHA, VA), PMI, points, or closing costs. Use it to understand the order of magnitude before talking to a lender.
What interest rate should I use?
Use the current market rate for the loan type and term you are considering. Mortgage rates change daily and vary by credit score, down payment, loan type, and lender. Check a rate aggregator (such as Freddie Mac's weekly survey or a comparison site) for a current benchmark, then use the lender's quoted rate once you have one. Even a half-point difference changes the affordable loan by tens of thousands of dollars on a 30-year term.
Forward calculation vs. backward calculation: two very different mortgage questions
Most mortgage calculators work forward: you enter a home price and they compute a monthly payment. This calculator works backward: you enter your income and debts and it computes a home price. The difference is not just cosmetic — they are solving different algebraic problems, and the backward version is the one that actually matches how most buyers approach their first home search.
The forward problem: what is the payment on this price?
The forward calculation uses the standard amortization formula: P = L × [r(1+r)^n] / [(1+r)^n − 1], where L is the loan amount, r is the monthly rate, and n is the number of payments. Given L, r, and n, you compute P directly. This is straightforward and is what every basic mortgage calculator does.
The backward problem: what price can I afford?
The backward problem starts with a payment budget derived from your income and DTI target, then solves for L. Rearranging the amortization formula gives: L = PMT × [(1+r)^n − 1] / [r(1+r)^n]. The payment budget itself requires subtracting existing debts from your total DTI allowance, then subtracting property tax, insurance, and HOA from what's left, to isolate the maximum principal-and-interest payment the income can support. Only then is the formula solved for the affordable loan amount. Adding your down payment on top yields the maximum home price.
Why the two problems give different intuitions about the same market
A buyer who works forward might pick a $450,000 home, compute the payment, and decide whether they can afford it. A buyer who works backward discovers that on their income with their debts, the math supports at most $380,000 — before they fall in love with a specific listing. The backward calculation forces an objective constraint before emotion enters the picture, which is why financial advisors and lenders use DTI ratios rather than asking what payment "feels" comfortable. Both calculations use the same formula; the direction you solve it changes what you learn.