How Much House Can I Afford?
Calculator inputs
Live result stays visible while you fill out the sections below.
Income and debts
| Name | Monthly Payment | Actions |
|---|
Loan terms and cash
Housing costs
Affordability result
Enter your numbers to see whether the result is comfortable, a stretch, or difficult.
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Methodology and assumptions
This calculator estimates mortgage affordability by first finding a monthly housing budget, then subtracting property taxes, homeowners insurance, HOA dues, and PMI to isolate the principal-and-interest payment. It then uses the fixed-rate amortization formula to estimate the maximum loan amount and adds the effective down payment to estimate maximum home price.
- Formulas: income mode uses the lower of front-end DTI room and back-end DTI room. Payment mode uses your stated comfortable monthly housing payment. Loan principal is estimated from the standard present-value formula for level monthly payments.
- Cash assumptions: closing costs, fixed upfront costs, and reserve targets reduce the cash left for down payment before home price is calculated.
- Limitations: real approvals can include credit score, loan-to-value, assets, property type, local taxes, lender overlays, and program-specific rules that this educational tool cannot verify.
- Review details: Last reviewed July 5, 2026 by the Starlight Tools editorial team for formula accuracy, plain-language guidance, and finance-calculator usability.
Informational only - not financial, tax, legal, or mortgage advice.
How lenders estimate home affordability
Mortgage affordability is mainly a cash-flow question: how much monthly housing cost can fit beside existing debt and still leave a workable budget? Lenders commonly compare your gross monthly income with two debt-to-income ratios. The front-end DTI looks at housing only: principal, interest, property taxes, homeowners insurance, HOA dues, and PMI. The back-end DTI adds other monthly debts such as car loans, student loans, and credit card minimums. This calculator uses both when you choose income mode, then shows which one limits the result.
28/36 vs 31/43 DTI rules
A conservative planning rule is often written as 28/36: housing near 28% of gross income and all debts near 36%. Some mortgage programs use broader references such as 31/43. A result above 43% back-end DTI is often harder to support because other debts are already consuming a large share of income. The calculator labels results as comfortable, stretch, or difficult so the number is easier to interpret than a percentage alone.
What affects your maximum home price
Your maximum home price can move sharply when the mortgage rate, loan term, taxes, insurance, HOA dues, or PMI changes. Location costs matter because a high property-tax area can leave less room for principal and interest even when the purchase price looks reasonable. Closing costs and reserve targets also matter: cash used at closing is cash that cannot increase the down payment.
How to increase affordability
- Reduce monthly debts before applying so the back-end DTI cap leaves more room for housing.
- Increase down payment cash, especially if it reduces or removes PMI.
- Compare tax, insurance, and HOA assumptions by location instead of using one flat estimate.
- Test different rates and terms, but remember that a lower payment does not automatically mean a comfortable budget.
Example calculation
Suppose a buyer earns $8,000 gross per month, has $620 in other monthly debt payments, and uses 31% front-end and 43% back-end DTI caps. The front-end cap allows $2,480 for housing. The back-end cap allows $3,440 total debt, so after $620 of other debts it leaves $2,820 for housing. The stricter number is therefore $2,480 per month.
With a 6.5% fixed rate, 30-year term, $300 in monthly property taxes, $80 in monthly insurance, no HOA, and PMI at 0.5% of the loan annually, the calculator backs into roughly $1,970 for principal and interest, about $130 for PMI, and a maximum loan near $312,000. With $60,000 of purchase cash and no closing-cost reserve entered, the estimated affordable home price is about $372,000. If you add closing costs or reserve months, the effective down payment falls and the home-price estimate comes down.
Mortgage affordability FAQ
How much house can I afford on my income?
Start with gross monthly income, subtract existing debts through the back-end DTI cap, then compare that with the housing-only front-end cap. The lower monthly housing budget is the practical ceiling before local costs and cash assumptions are applied.
What DTI ratio do lenders prefer?
Many planning examples use 28/36, while some programs reference 31/43 or other limits. Lower ratios generally leave more approval room and more household budget flexibility.
Does PMI affect affordability?
Yes. PMI is part of the monthly housing payment, so it reduces the amount left for principal and interest and can lower the maximum loan amount.
Should I include property taxes and insurance?
Yes. Taxes and insurance are real recurring housing costs and are often included in lender affordability checks. Excluding them can make the home price look too high.
How do closing costs affect budget?
Closing costs consume cash that might otherwise become down payment. This calculator reduces effective down payment by closing costs and reserve targets before estimating the home price.
Can I afford more with a larger down payment?
Usually. More down payment can raise the affordable home price for the same loan amount and may reduce PMI, but monthly taxes, insurance, and HOA dues can still limit the result.
Why is my back-end DTI limiting me?
Back-end DTI includes housing plus other monthly debt payments. Existing car loans, student loans, or credit card minimums can leave less room for a mortgage even when the housing-only ratio looks fine.