House Affordability Calculator - Find Your Budget
Free house affordability calculator to determine maximum home price. Calculate affordable mortgage, budget limits, and DTI ratios with 2025 lending standards
House Affordability Calculator
Results
What is a House Affordability Calculator?
A house affordability calculator is a free financial tool that helps you determine the maximum home price you can afford based on your income, debts, and down payment. It applies 2025 lending standards including the 28/36 rule to calculate your affordable home budget.
This calculator helps with:
- Home shopping - Know your budget before looking at properties
- Financial planning - Understand what income level you need
- Debt management - See how debts impact home buying power
- Down payment planning - Determine optimal down payment amount
- Mortgage pre-approval - Prepare for lender qualification
For detailed monthly payment calculations on your affordable home price, use our mortgage calculator to see the complete breakdown of principal, interest, taxes, and insurance.
Understanding your debt-to-income ratio is crucial for home affordability. Our debt-to-income ratio calculator provides detailed DTI analysis to help you qualify for the best mortgage rates.
Planning how much to save for your home purchase? Our down payment calculator helps you determine the optimal down payment strategy to maximize affordability and minimize PMI costs.
How House Affordability Works (28/36 Rule)
Lenders use the 28/36 rule to determine how much house you can afford:
Front-End Ratio (28%)
Your monthly housing costs (PITI) should not exceed 28% of your gross monthly income.
Back-End Ratio (36%)
Your total monthly debt payments including housing should not exceed 36% of gross income.
Calculation Formula: Maximum Home Price = (Monthly Income × 0.28 - Monthly Property Tax - Monthly Insurance) / (Monthly Payment Factor) + Down Payment
Where Monthly Payment Factor = [r(1+r)^n]/[(1+r)^n-1], r = monthly interest rate, n = number of months
Key Concepts
DTI Ratios
Debt-to-Income ratios measure your monthly debt obligations as a percentage of gross monthly income. Lower ratios qualify for better rates.
PITI
Principal, Interest, Taxes, and Insurance - the four components of your total monthly housing payment that lenders consider.
Down Payment
Upfront payment that reduces loan amount and increases buying power. 20% down avoids PMI requirements.
How to Use This Calculator
Enter Annual Income
Input your gross annual income before taxes (e.g., $80,000)
Enter Monthly Debts
Include car loans, credit cards, student loans (e.g., $500)
Enter Down Payment
Amount you've saved for down payment (e.g., $40,000)
Enter Interest Rate
Current mortgage interest rate you expect (e.g., 6.5%)
Add Housing Costs
Enter estimated monthly property tax and insurance
Review Affordability
See maximum home price and DTI ratios instantly
Benefits of Using House Affordability Calculator
- • Realistic Budget: Know your true home buying budget before house hunting to avoid disappointment.
- • Lender Standards: Uses 2025 lending standards (28/36 rule) that lenders actually apply.
- • DTI Analysis: See both front-end and back-end DTI ratios to understand qualification.
- • Down Payment Impact: Understand how down payment amount affects your buying power.
- • Debt Management: See how paying off debts increases home affordability significantly.
Factors That Affect Affordability
1. Income Level
Higher income = Higher affordability. Each $10,000 in annual income increases buying power by approximately $35,000.
2. Existing Debts
Lower monthly debts = Higher affordability. Paying off $300/month debt can increase buying power by $50,000+.
3. Interest Rates
Lower rates = Higher affordability. A 1% rate decrease can increase buying power by 10-15%.
4. Down Payment Amount
Larger down payment = Higher home price. Every $10,000 in down payment directly increases affordability.
Frequently Asked Questions (FAQ)
Q: How much house can I afford?
A: Use the 28/36 rule: your monthly housing payment should not exceed 28% of your gross monthly income, and your total monthly debt payments should not exceed 36%. This calculator applies these 2025 lending standards.
Q: What is the 28/36 rule?
A: The 28/36 rule means housing costs should be no more than 28% of gross income (front-end DTI), and all debt payments including housing should be no more than 36% (back-end DTI).
Q: What DTI ratio do I need?
A: Most conventional lenders require front-end DTI below 28% and back-end DTI below 36%. FHA loans may allow up to 31% front-end and 43% back-end ratios.
Q: Should I include HOA fees?
A: Yes, include HOA fees in your monthly debts since lenders count them as recurring housing expenses that directly impact your DTI ratios.