Home Affordability Calculator
Find your max affordable home price from income and debts — with a full monthly payment breakdown including tax and insurance.
Uses the standard 28/36 rule lenders apply: housing costs ≤ 28% of gross income and total debts ≤ 36%. Assumes a 30-year fixed mortgage, taxes/insurance rolled into the payment. Closing costs, PMI, HOA, and maintenance are not included.
The price you can afford is not the loan you can get
Most 'how much house can I afford' math stops at the mortgage payment — and misses the 25–40% that property tax, insurance, and maintenance add on top. This home affordability calculator works the way lenders do: it starts from your income, applies the standard 28/36 debt rules, and solves backwards for the maximum price whose full monthly payment (principal, interest, tax, and insurance) fits. If you want to see all our calculators in one place, visit CalcSuite.
Two limits compete, and the tighter one wins. The housing ratio caps your total housing payment at 28% of gross monthly income. The debt ratio caps all monthly debts — housing plus cars, cards, and loans — at 36%. If your non-housing debts are small, the 28% rule sets your ceiling; if they're large, the 36% rule bites first. That's why paying down a car loan can raise your affordable price more than a raise can.
Treat the result as a ceiling, not a target. The buyers who sleep best usually land 10–20% below their maximum, with the gap funding savings, repairs, and a life outside the house.
How it works
- 1Enter income & debts
Annual household income and all monthly debt payments.
- 2Set down payment & rate
Your cash down plus the mortgage rate you're likely to get.
- 3Add tax & insurance
Annual property tax rate and yearly homeowners insurance.
- 4Get your ceiling
Max affordable price plus the full monthly payment breakdown.
The formula
The 28/36 rule, with numbers
Take a household earning $120,000 a year ($10,000/month) with $600/month in debts. The 28% housing cap gives $2,800/month. The 36% total-debt cap gives $3,600/month minus $600 in debts = $3,000/month. The tighter limit — $2,800 — is the housing budget. With 20% down at a 6.5% rate, that supports roughly a $480,000–$520,000 home once tax and insurance are included.
How debts eat your home-buying power ($120k income, 6.5% rate, 20% down)
| Monthly debts | Max housing payment | Approx. max price |
|---|---|---|
| $0 | $2,800 | ~$550,000 |
| $600 | $2,800 | ~$490,000 |
| $1,200 | $2,400 | ~$420,000 |
| $1,800 | $1,800 | ~$315,000 |
Notice the cliff: once debts push the 36% rule below the 28% rule, every extra dollar of monthly debt directly subtracts a dollar from your housing budget — and roughly $150–$170 of home price. Clearing a $500/month car payment before house-hunting can be worth $75,000+ of buying power. Check your take-home baseline with a Paycheck Calculator while you're at it.
Why PITI matters more than the mortgage payment
PITI — principal, interest, taxes, insurance — is the number that leaves your account every month, and it's the number lenders underwrite. A $2,000 mortgage payment in a high-tax area can easily become $2,800 PITI; in a low-tax area the same loan might be $2,300. Two identical houses in different counties can have wildly different affordability.
Property tax rates vary enormously: roughly 0.3% to over 2% of assessed value per year depending on the state and county. On a $400,000 home, that's the difference between $100/month and $700/month — enough to swing your affordable price by six figures. Always use local rates, not national averages.
Homeowners insurance has also been climbing in many regions, especially where weather risk is rising. Budget the actual quoted premium, not a guess: on expensive homes in high-risk areas it can rival the tax bill.
Down payment: the 20% question
Twenty percent down is the traditional benchmark because it avoids private mortgage insurance (PMI) — typically 0.5–1% of the loan per year — and gets you better rate offers. On a $400,000 home, 20% down is $80,000: a serious savings target, and exactly the kind of goal to map with a Savings Goal Calculator.
But waiting for 20% has a cost too: years of rent paid while prices and rates move. Many buyers succeed with 5–10% down plus PMI, which can be removed once equity reaches 20%. The right answer depends on your market's trajectory and your rent — compare the total picture with a Rent vs Buy Calculator rather than treating 20% as a moral requirement.
Whatever you put down, keep a separate cash reserve after closing. Buying with your last dollar and then facing a $8,000 roof repair is how affordable houses become unaffordable lives.
Down payment trade-offs on a $400,000 home
- ▸5% down ($20,000): lowest cash needed, PMI added, highest monthly payment.
- ▸10% down ($40,000): PMI still applies but smaller; a common first-buyer landing spot.
- ▸20% down ($80,000): no PMI, best rates, but years of saving and rent in the meantime.
- ▸Above 20%: diminishing returns — extra cash often earns more invested or kept liquid.
Common home-buying budget mistakes
- ▸Shopping at the pre-approval maximum instead of a comfortable payment.
- ▸Forgetting property tax and insurance — the 'I' and 'T' in PITI.
- ▸Ignoring maintenance: budget roughly 1% of home value per year.
- ▸Draining savings for the down payment with no post-closing reserve.
- ▸Skipping HOA dues, which can add hundreds per month in condos and planned communities.
- ▸Assuming today's rate is permanent — know what your payment looks like if you refinance higher or lower.
- ▸Buying for a 2-year stay: transaction costs typically need 5–7 years to pay off.
- ▸Letting lifestyle creep absorb the raise that was supposed to fund the house.
Frequently asked questions
How much house can I afford on my salary?+
A common lender guideline caps housing costs at 28% of gross income and total debts at 36%. Enter your income, debts, down payment, and rate above and the calculator solves for the maximum home price under both limits.
What is the 28/36 rule?+
Lenders typically want your housing payment (principal, interest, taxes, insurance) at or below 28% of gross monthly income, and all monthly debts — housing plus cars, cards, and loans — at or below 36%. This calculator applies both and uses whichever limit is tighter.
Does the calculator include property tax and insurance?+
Yes. The monthly payment is PITI: principal + interest on the mortgage, plus property tax and homeowners insurance. Taxes and insurance often add 25–40% on top of the loan payment, which is why mortgage-only estimates mislead.
How does my down payment change affordability?+
A larger down payment shrinks the loan, which lowers the monthly payment and lets the same income support a higher price. It also changes your down-payment share: under 20% down typically means paying for private mortgage insurance (PMI) on top.
Should I count my partner's income?+
If you're buying jointly and both incomes will service the loan, include the household total. If only one borrower is on the mortgage, lenders generally count only that borrower's income and debts — use those figures.
How do interest rates affect what I can afford?+
Dramatically. On a 30-year loan, each percentage point of rate moves the monthly payment roughly 10–12%. That's why the same salary affords a very different house in a 4% market versus a 7% market. See the long-run cost with a Mortgage Payoff Calculator.
Is renting or buying better for me?+
It depends on how long you'll stay, local price-to-rent ratios, and your down payment. Buying typically wins for stays beyond 5–7 years in most markets; renting wins for short stays or very expensive cities. Run both sides with a Rent vs Buy Calculator.
What costs aren't in this calculator?+
Closing costs (typically 2–5% of price), PMI if under 20% down, HOA dues, maintenance (budget ~1% of home value per year), moving costs, and utilities. Add these to your cash planning even though they don't change the lender's price ceiling.
How much emergency fund should a homeowner keep?+
Bigger than a renter's: 3–6 months of expenses plus a home-repair buffer, since there's no landlord to call. Size it properly with an Emergency Fund Calculator before you stretch for the maximum price.
Can I afford the maximum the calculator shows?+
The calculator shows the lender's ceiling, not a recommendation. Many buyers are more comfortable 10–20% below the max, keeping room for savings, travel, and life. Affording the payment and enjoying the house are different things.
