Mortgage Affordability Calculator
Find the maximum home price you can likely afford based on your income and debts.
Your Details
Breakdown
Visual split of the key components
- Financed Amount392362.8324519412
- Down Payment40000
Sensitivity
How the result changes across a range
How It Works
- Enter the values on the left.
- Press Calculate to see your results and charts.
- Use Reset to start over from the defaults.
Formula Used
Max Loan derived from that payment using the standard amortization formula.
Good to Know
- • Many lenders cap total DTI (housing + other debts) around 36-43%.
- • A larger down payment increases your max home price for the same loan payment.
Important Notes
- • This is a rule-of-thumb estimate, not a formal pre-approval.
- • Actual approval depends on credit score, assets, and lender-specific guidelines.
How Lenders Think About Affordability
Lenders typically use debt-to-income ratio caps to determine how much housing payment a borrower can support — often capping the housing payment alone around 28% of gross income, and total debt (housing plus other obligations) around 36-43%. This calculator uses your chosen cap applied to gross income minus existing debts, working backward to a maximum affordable home price.
This Is a Starting Point, Not a Pre-Approval
Actual mortgage approval considers many factors beyond DTI — credit score, employment history, cash reserves, and the specific loan program's guidelines all play a role. Two borrowers with identical income and debt can be approved for very different amounts depending on these other factors, so treat this figure as a planning estimate to guide your home search, not a guarantee of what a lender will actually offer.
Laying Out the Terminology
- Front-end ratio — housing payment alone as a percentage of gross income.
- Back-end ratio — housing plus all other debt payments as a percentage of gross income.
- Qualifying income — the income figure lenders use, which may exclude some variable income sources.
Seeing the Math Work: From Income to Max Home Price
A household earning $8,000/month, with $400 in other debts, using a 36% DTI cap at 6.5% over 30 years:
Max loan (from payment formula) ≈ $392,000
Plus $40,000 down payment → Max home price ≈ $432,000
Notice that the $400 in other debts directly reduced buying power by more than $400 worth of home price — because that $400/month, compounded through the loan formula, represents tens of thousands of dollars of borrowing capacity. Paying down other debt before house-hunting can meaningfully raise what you qualify for.
Affordability by Income Table
At a 36% DTI cap, 6.5% rate, 30-year term, $40,000 down payment:
| Monthly Income | Max Home Price |
|---|---|
| $6,000 | ≈$320,000 |
| $8,000 | ≈$432,000 |
| $10,000 | ≈$544,000 |
Common Errors to Sidestep When Estimating Affordability
- Forgetting taxes and insurance — this estimate is P&I only; real budgets need PITI.
- Using gross instead of a realistic take-home figure to sanity check — DTI uses gross income, but comfort should be checked against net.