Home Affordability Calculator
Find out how much house you can afford based on your income, debts, and down payment. Calculates your maximum home price using front-end and back-end DTI ratios.
Home Affordability
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Enter Values
Back-End DTI Ratio
34.0% (limit: 36%)
Down Payment Percentage
17.3%
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Maximum Home Price
$346,981
With $60,000 down (17.3%)
Monthly Payment
$2,333/mo
Income Ratio
28%
Debt-to-Income Ratios
The Formula
Home affordability is determined by two DTI limits: front-end (housing costs ÷ gross income) and back-end (all debts ÷ gross income). The stricter of the two sets your maximum monthly payment.
Variable Definitions
Housing Ratio
Monthly housing costs (P&I + taxes + insurance) as a percentage of gross monthly income. Typically capped at 28%.
Total Debt Ratio
All monthly debt payments including housing, as a percentage of gross monthly income. Typically capped at 36–43%.
Principal & Interest
The core mortgage payment calculated from the loan amount, interest rate, and term.
Gross Debt Service
Another term for front-end DTI, used commonly in Canada and the UK.
How to Use This Calculator
- 1
Enter your total household gross annual income before taxes.
- 2
Enter all current monthly debt payments (car, student loans, credit cards).
- 3
Enter your available down payment — more down means a larger home you can afford.
- 4
Enter the current mortgage interest rate and your preferred loan term.
- 5
Optionally adjust property tax, insurance, and DTI limit for your situation.
- 6
Review your maximum home price, loan amount, and DTI ratios.
Common Applications
- Determine the maximum home price you can afford based on your household income, down payment, and current debt obligations.
- Understand how different down payment amounts and interest rates affect your monthly mortgage payment and total borrowing power.
- Apply the 28/36 debt-to-income rule to find a comfortable price range that avoids becoming house-poor.
Your maximum home price is determined by the stricter of front-end (housing only) and back-end (housing + debts) DTI limits
Understanding the Concept
Home affordability is governed by your debt-to-income (DTI) ratio — the percentage of your gross income that goes toward debt payments. Most conventional lenders use the 28/36 rule: no more than 28% of gross income on housing costs and no more than 36% on total debts. FHA loans are more lenient, allowing up to 31%/43%. The lower of the two limits (front vs. back end) determines your true maximum. Down payment also plays a major role: a larger down payment reduces your loan amount, which lowers monthly payments and allows you to afford a more expensive home.
Frequently Asked Questions
Sources & References
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