About the Mortgage Affordability Calculator
Lenders look at how much of your gross income would go to housing and to all debts combined. A widely cited guideline is 28% for housing and 36% for total debt, but programs and lenders use different limits — so both are editable inputs here.
The result is a planning estimate. It is not a pre-approval and does not consider your credit history, savings, or employment.
How It Works
The maximum housing payment is the lower of (front-end limit × monthly income) and (back-end limit × monthly income − your other debt payments).
The calculator then solves for the home price whose principal and interest (after your down payment), property tax, insurance, and HOA fees add up to exactly that payment.
Formula
- fmonthly payment per $1 borrowed at your rate and term
Example
A household earning $120,000 a year with $500 in monthly debt payments has $60,000 for a down payment and expects a 6.5% 30-year loan, 1.1% property tax, and $1,500 a year insurance.
Inputs
- Monthly income
- $10,000
- Guideline
- 28% / 36%
- Down payment
- $60,000
Results
- Affordable price
- $422,011
- Loan amount
- $362,011
- Monthly housing cost
- $2,800.00
Here the 28% housing limit ($2,800) is lower than the 36% total-debt limit minus debts ($3,100), so it sets the budget.
Assumptions & Limitations
- DTI limits are editable guidelines, not lender rules.
- Property tax is a percentage of the purchase price; insurance and HOA are fixed amounts.
- Not included: PMI, closing costs, cash reserves, credit score effects on the rate, and changes in rates.
Understanding Your Results
- Estimated Affordable Home Price: The price at which your estimated housing cost reaches the selected limit.
- Estimated Monthly Housing Cost: Principal, interest, property tax, insurance and HOA at that price.
- Resulting Total DTI: Housing cost plus other debts as a share of gross monthly income.