Home affordability calculator: find a home price that fits your income and debts
Before falling in love with a home, it helps to know what price range makes sense. Lenders look at how much of your income would go to housing and other debts, but what a lender will approve and what feels comfortable in your own budget can be different numbers. Starting from your income, debts and savings gives you a grounded place to begin.
Home affordability calculator
Adjust the guidelines
- Home price within these guidelines
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- Monthly housing budget
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- Loan amount
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Uses two common lender guidelines: housing costs (principal, interest, property tax, insurance, PMI and HOA) of no more than 28% of gross monthly income, and all debt payments of no more than 36%. Actual lending limits vary by lender and loan type, and approval also depends on credit, savings and other factors. Closing costs and maintenance are not included. Everything here runs in your browser; nothing you enter is stored or sent.
What this calculator can help you understand
- A home price that keeps your housing costs within common lender guidelines.
- Your monthly housing budget under those guidelines.
- How much you’d borrow, and whether PMI would apply.
- Which limit applies to you: the share of income going to housing, or to all debts.
When it’s useful
- Before you start looking at homes, to set a realistic price range.
- When deciding how much to save for a down payment.
- When considering paying off other debts first, to see how that changes your range.
- When interest rates change, to see how your range moves.
Who it’s for
- First-time buyers working out a price range.
- Couples combining incomes and debts.
- Anyone planning a move who wants to see what their budget supports.
What to enter
| Input | What it means | Where to find it |
|---|---|---|
| Household income per year | Total income before taxes for everyone on the loan | Pay stubs or tax returns |
| Monthly debt payments | Minimum payments on car loans, student loans, credit cards and other debts | Your statements |
| Down payment | Cash you’ll put toward the price | Your savings |
| Interest rate | An expected mortgage rate | Lender quotes |
| Loan term | How long you’ll repay | Your choice |
| Property tax rate per year | Property tax as a percent of the price | Your county’s typical rate or listings |
| Home insurance per year | Expected annual premium | An insurance quote |
| HOA dues per month | Association fees, if any | Listings in your area |
| Guidelines (optional) | The housing and total-debt limits, and the PMI rate | Defaults are 28%, 36% and 0.5% |
How to use it
- Enter your household income and monthly debt payments.
- Enter your down payment.
- Enter an expected rate and term.
- Enter your area’s property tax rate, insurance and any HOA dues.
- Read the home price first, then the monthly housing budget behind it.
- Open Adjust the guidelines to try a stricter or looser limit.
Understanding your results
- Monthly housing budget is the smaller of 28% of your gross monthly income, or 36% minus your other debt payments.
- Home price within these guidelines is your down payment plus the largest loan whose total housing cost (principal, interest, taxes, insurance, PMI and dues) fits that budget.
- Loan amount is that price minus your down payment.
- PMI is included automatically if your down payment would be under 20% of the price.
What it doesn’t consider: your credit score, savings left after closing, closing costs, or your other goals.
A worked example
Suppose your household earns $120,000 a year before taxes, pays $600 a month on other debts, and has $60,000 for a down payment. You expect a 6.5% rate on a 30-year loan (a hypothetical rate), property tax of 1.1% a year and insurance of $1,800 a year.
- Monthly income: $10,000. The 28% housing limit allows $2,800.00; the 36% total-debt limit allows $3,000.00 after your $600 of debts. The smaller, $2,800.00, is your housing budget.
- Result: a home price of about $399,038, with a loan of $339,038. Your down payment would be 15.0% of the price, so PMI is included.
- What it means: at that price, housing costs would take about 28% of your gross income. Your take-home pay is lower, so check the payment against your actual budget.
How the result changes
The same household with different monthly debt payments:
| Other debt payments | Housing budget | Home price |
|---|---|---|
| $0 | $2,800.00 | $399,038 |
| $600 | $2,800.00 | $399,038 |
| $1,200 | $2,400.00 | $346,778 |
The same budget at different rates:
| Interest rate | Home price |
|---|---|
| 5.5% | $430,121 |
| 6.5% | $399,038 |
| 7.5% | $371,694 |
Up to a point, other debts don’t change the result because the housing limit is the tighter one; beyond it, every extra dollar of debt payments reduces the price you can afford.
Common mistakes
- Using take-home pay. Lender guidelines use gross income, before taxes. Enter gross income here, then compare the payment with your take-home budget.
- Leaving out debt payments. Include every required minimum payment, even small ones.
- Forgetting closing costs and reserves. Your down payment shouldn’t be all your savings.
- Treating the result as a target. It’s an upper estimate under common guidelines, not a recommendation.
What to do with your result
- Use the mortgage calculator to see the full payment for specific homes in your range.
- If debts are limiting your range, the debt payoff calculator shows how quickly you could reduce them.
- Talk to lenders about pre-approval when you’re ready; they’ll look at your full financial picture.
Limitations to keep in mind
This estimate uses common lender guidelines, not any lender’s actual approval criteria, which vary by lender and loan program and depend on credit and other factors. Taxes, insurance and dues are estimates. It isn’t a pre-approval, an offer or financial advice.
Frequently asked questions
What are the 28% and 36% guidelines?
They’re common lender rules of thumb. Housing costs (principal, interest, taxes, insurance, PMI and HOA dues) should take no more than about 28% of your gross monthly income, and all debt payments together no more than about 36%. Some loan programs allow higher ratios, and lenders consider other factors too.
Should I aim for the maximum?
Not necessarily. The guidelines use income before taxes and don’t account for childcare, retirement savings or other goals. Many people choose a price below the maximum to keep room in their budget.
How do my other debts affect the result?
They count toward the 36% limit. In our example, with $600 of debt payments, the 28% housing limit sets the budget at $2,800.00. With $1,200 of debt payments, the 36% limit takes over and the affordable price falls from $399,038 to $346,778.
Does the interest rate matter much?
A lot. In our example, the price within the guidelines is about $430,121 at 5.5%, $399,038 at 6.5% and $371,694 at 7.5%, with the same monthly budget.
Is this the same as a pre-approval?
No. A pre-approval comes from a lender after reviewing your credit, income documents and assets. This is an estimate to help you plan.
What about closing costs?
They’re not included. Closing costs are paid up front, separately from the down payment, so set aside money for them too.
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This calculator gives estimates for illustration, based on the figures you enter and the assumptions described on this page. It isn’t financial, tax or legal advice, an offer, or a guarantee of any outcome.