Mortgage Affordability Calculator
Lenders judge affordability with two ratios: housing costs under 28% of gross income, and all debts under 36%. This calculator applies both and converts the result into a house price.
How it works
Front-end ratio: housing payment ≤ 28% of gross monthly income. Back-end ratio: housing + all monthly debts ≤ 36% of gross monthly income. The loan is the present value of the affordable principal-and-interest payment: L = P × (1 − (1+i)−n) ÷ i. House price = loan + down payment.
Example: $120,000 income ($10,000/month), $500 debts, $60,000 down, 6% over 30 years, $500 taxes/insurance/HOA: front-end limit $2,800, back-end limit $3,100, so housing is capped at $2,800; principal & interest $2,300 supports a loan of $383,620.70 and a maximum price of $443,620.70.
Frequently asked questions
What is the 28/36 rule?
A lender guideline: housing costs (principal, interest, taxes, insurance, HOA) at or under 28% of gross income, and housing plus all other debts at or under 36%.
Why do taxes and insurance matter?
They come out of the same 28% housing budget, so every $100 of tax/insurance/HOA cuts about $16,700 off the affordable loan at 6% over 30 years.
Does my credit score change this?
Yes in real underwriting — a lower score can mean a higher rate or a stricter ratio. This calculator shows the standard-rule answer, not a lender decision.
Should I buy at the maximum?
The maximum is a ceiling, not a target. Leave room for maintenance, emergencies and rate changes if your rate is adjustable.