House Affordability Calculator
Find out how much house you can afford based on income, debts, and down payment. Full monthly breakdown with tax, insurance, and PMI.
For informational purposes only. Not financial advice. Calculations are estimates and may not reflect your exact situation. Consult a qualified financial adviser for personalised guidance.
About House Affordability Calculator
Find out how much house you can afford based on your income, debts, down payment, interest rate, and comfort level. The calculator works backwards from your monthly budget to find the maximum purchase price, then shows a full payment breakdown including principal, interest, property tax, insurance, and PMI.
How Is Affordability Calculated?
The calculator uses the front-end DTI approach: your total monthly housing payment (PITI + PMI) should not exceed a set percentage of your gross monthly income. You choose the percentage using the comfort slider.
Max Housing Payment = Gross Monthly Income x Comfort Level %
It then subtracts estimated property tax, insurance, and PMI to find the maximum mortgage payment, and works backwards to find the home price.
Worked example: $90,000 annual income ($7,500/month), 10% down payment, 6.5% rate, 30-year term, 28% comfort level:
- Max housing payment: $7,500 x 28% = $2,100/month
- Estimated property tax: ~$280/month (1.1% of home price / 12)
- Estimated insurance: ~$125/month
- Estimated PMI: ~$100/month (0.5% of loan / 12)
- Available for mortgage P&I: $2,100 - $280 - $125 - $100 = $1,595
- Max loan at 6.5% for 30 years: ~$252,000
- With 10% down payment: max home price ~$280,000
The 28/36 Rule
The most widely cited affordability guideline:
| Rule | Limit | What It Means |
|---|---|---|
| 28% rule (front-end) | Housing costs under 28% of gross income | Your mortgage, tax, insurance, and PMI combined |
| 36% rule (back-end) | All debts under 36% of gross income | Housing + car + student loans + credit cards + other |
At 28%, here is what different income levels can typically afford (6.5% rate, 20% down, 30-year term):
| Annual Income | Max Housing Payment | Approximate Max Home Price |
|---|---|---|
| $50,000 | $1,167 | ~$170,000 |
| $75,000 | $1,750 | ~$270,000 |
| $100,000 | $2,333 | ~$365,000 |
| $125,000 | $2,917 | ~$460,000 |
| $150,000 | $3,500 | ~$555,000 |
| $200,000 | $4,667 | ~$745,000 |
These assume 20% down and no other significant debts. With 10% down, the max price drops because of PMI and higher loan amounts.
Conservative vs Aggressive: What the Comfort Level Means
| Comfort Level | % of Gross Income | Best For | Trade-off |
|---|---|---|---|
| Conservative | 20-25% | Single income, high expenses, variable income | Less house, more financial flexibility |
| Moderate (28%) | 28% | Dual income, stable employment, moderate debts | Standard recommendation |
| Stretch | 30-33% | High-cost areas, rapid income growth expected | Tight budget, less room for savings |
| Aggressive | 35-36% | Low other debts, high savings already | Financial stress likely, little margin for error |
A key insight: the 28% rule uses gross income, but you spend net income. If your effective tax rate is 25%, then 28% of gross equals about 37% of your take-home pay going to housing. At 33% of gross, you are spending roughly 44% of net income on housing.
The Full Monthly Cost of Homeownership
The mortgage payment is not the only housing cost. Budget for all of these:
| Cost | Typical Amount ($350K Home) | Included in Calculator? |
|---|---|---|
| Principal & interest | $1,770/month | Yes |
| Property tax | $320/month (1.1%) | Yes |
| Homeowners insurance | $125/month | Yes |
| PMI (if under 20% down) | $120/month | Yes |
| Maintenance & repairs | $290/month (1% of value/year) | No |
| HOA fees (if applicable) | $100-400/month | No |
| Utilities | $200-400/month | No |
The true monthly cost of owning a $350,000 home is closer to $2,800-3,200 when you include everything, not just the $1,770 mortgage payment. Factor in at least 1% of the home value per year for maintenance.
How Down Payment Affects Affordability
A larger down payment increases your buying power in two ways: it reduces the loan amount (lower payment) and eliminates PMI once you reach 20%.
| Down Payment | Max Home ($90K income, 28% DTI, 6.5%) | PMI? |
|---|---|---|
| 5% | ~$255,000 | Yes (~$115/month) |
| 10% | ~$280,000 | Yes (~$100/month) |
| 15% | ~$305,000 | Yes (~$60/month) |
| 20% | ~$330,000 | No |
| 25% | ~$360,000 | No |
Going from 5% to 20% down increases your buying power by about $75,000. Use the down payment calculator to see how different down payment percentages affect your specific numbers.
To check how a new mortgage affects your overall debt load, the debt-to-income ratio calculator shows front-end and back-end DTI. For specific monthly payment estimates on a property you are considering, the mortgage calculator breaks down the payment in detail.
All calculations run in your browser. No financial data is stored or sent anywhere.
Frequently Asked Questions
How is the maximum home price calculated?
The calculator uses the front-end DTI approach, limiting your total housing payment (principal, interest, tax, insurance, and PMI) to a percentage of your gross monthly income. You can adjust this from a conservative 20% up to an aggressive 36%. It then works backward to find the maximum home price that fits within that budget.
What is PMI and when does it apply?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home price. It protects the lender in case of default. PMI typically costs 0.5% to 1% of the loan amount per year. Once you build 20% equity, you can usually request to have it removed.
What comfort level should I choose?
The 28% rule is a widely recommended guideline for housing costs. Conservative (20-25%) gives you more financial breathing room for savings and unexpected expenses. Aggressive (30-36%) lets you buy more house but leaves less room in your budget. Choose based on your lifestyle and financial goals.
Does this include all the costs of buying a home?
This calculator estimates ongoing monthly costs including principal, interest, property tax, insurance, and PMI. It does not include one-time closing costs (typically 2-5% of the purchase price), moving costs, or ongoing maintenance. Budget separately for those.
How does the loan term affect affordability?
A 30-year term has lower monthly payments, which increases your maximum home price. A 15-year term has higher payments but saves significantly on total interest. The calculator lets you compare both to see the trade-off.
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