House Affordability Calculator
Work out the home price you can realistically afford from your income, debts and down payment.
About House Affordability Calculator
Conventional lenders apply two tests simultaneously. The front-end (housing) ratio caps your total housing payment (principal, interest, taxes, insurance — PITI) at 28% of gross monthly income. The back-end (total DTI) ratio caps all debt payments at 36%. The binding constraint is whichever produces the lower maximum payment, and from that payment limit we back-solve for the highest home price that fits. FHA guidelines are slightly more generous (31/43) and may allow a higher purchase price.
Formulas
Front-end DTI limit
Max PITI (front) = Gross Monthly Income × front-end limit %
- f_limit
- Front-end DTI limit (e.g. 28%)
Back-end DTI limit
Max PITI (back) = Gross Monthly Income × back-end limit % − Monthly debts
- b_limit
- Back-end DTI limit (e.g. 36%)
- D
- Existing monthly debt payments
Worked example
With the default values below, House Affordability Calculator returns Maximum Home Price of $360,985. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Annual Gross Incomeaccepts 1–5,000,000 $
- 100,000 $
- Monthly Debt Paymentsaccepts 0–50,000 $
- 500 $
- Down Paymentaccepts 0–2,000,000 $
- 60,000 $
- Annual Interest Rateaccepts 0–20 %
- 6.5 %
- Loan Termaccepts 5–40 years
- 30 years
- Annual Property Tax Rateaccepts 0–5 %
- 1.1 %
- Annual Homeowner's Insuranceaccepts 0–50,000 $
- 1,200 $
- Underwriting Standardone of Conventional (28/36), FHA (31/43), Conservative (25/33)
- Conventional (28/36)
Results
- Maximum Home Price
- $360,985
- Maximum Loan Amount
- $300,985
- Total Monthly Payment (PITI)
- $2,333.33
- Principal & Interest
- $1,902.43
- Est. Monthly Property Tax
- $330.90
- Monthly Insurance
- $100.00
- Down Payment %
- 16.6%
- Loan-to-Value (LTV)
- 83.4%
- PMI RequiredPMI is typically required when LTV exceeds 80%.
- true
- Front-End DTI
- 28.0%
- Back-End DTI
- 34.0%
- Limiting FactorWhich DTI ratio is the binding constraint on your purchase price.
- front-end
Step by step
- 1Gross monthly income= $8,333
- 2Front-end limit (28% of gross)= $2,333.33
- 3Back-end limit (36% of gross − existing debts)= $2,500.00
- 4Binding constraint: front-end= Max PITI = $2,333.33
- 5Maximum home price (binary search)= $360,985
- 6Resulting monthly PITI breakdown= $2,333.33
Assumptions and limits
- The result is derived only from the 8 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate based on conventional DTI guidelines. Actual loan qualification depends on credit score, loan type, reserves and lender discretion. Consult a licensed mortgage professional.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
This is an estimate based on conventional DTI guidelines. Actual loan qualification depends on credit score, loan type, reserves and lender discretion. Consult a licensed mortgage professional.
Frequently Asked Questions
Why does the calculator find the binding constraint automatically?
Lenders apply both tests simultaneously; you must satisfy both. The tighter one determines how much house you can afford. High existing debts typically make the back-end ratio binding.
What counts as a monthly debt?
Car loans, student loans, credit card minimum payments, personal loans, alimony and child support. Do not include utility bills, groceries or the future housing payment itself — those are not counted by underwriters.
Does a higher down payment let me buy a more expensive home?
Yes, for two reasons: a larger down payment reduces the loan, which reduces the P&I component of PITI, allowing a higher total price within the DTI limits. It also lowers LTV, potentially eliminating PMI.
What is the 20% down payment threshold for?
At 80% LTV or below, conventional lenders drop the PMI requirement. This calculator flags whether your down payment meets that threshold but does not add a PMI estimate to the payment — use the Down Payment Calculator for that detail.