Finance
Find the maximum home price you can afford based on income, debt, and lending criteria.
Affordable Home Price
$256,002maximum
Based on your income, existing debts, down payment, and the specified DTI limit. This is the maximum price; you may choose to buy less.
A house affordability calculator estimates the maximum home price you can finance based on your gross annual income, monthly debt obligations, desired down payment, mortgage interest rate, loan term in years, annual property tax rate, homeowners insurance cost, and your lender's debt-to-income (DTI) limit. It applies standard mortgage lending criteria to show you a realistic price range before house hunting.
The calculator computes your maximum monthly mortgage payment by applying your DTI limit to your monthly income, then subtracting existing monthly debts. It deducts estimated property taxes and insurance from this budget to find the remaining capacity for principal and interest. Using the mortgage amortization formula, it backs out the maximum loan amount, then adds your down payment to show the affordable home price.
Max Monthly Payment = (Annual Income ÷ 12) × DTI% − Monthly Debts; PI Budget = Max Payment − Property Tax − Insurance; Loan = PI Budget × Amortization Factor; Home Price = Loan + Down PaymentDTI (debt-to-income) ratio limits what percentage of gross monthly income lenders allow for all debt payments. Your maximum mortgage payment is capped by this ratio minus any existing debts. The remaining budget covers principal, interest, taxes, and insurance. The amortization factor depends on your interest rate and loan term; higher rates or shorter terms require larger monthly payments for the same loan amount.
| Input | Result | Notes |
|---|---|---|
| Income: $90,000 | Debts: $500 | Down: $40,000 | Rate: 6.5% | Term: 30 years | Tax: 1.1% | Insurance: $1,200 | DTI: 36% | Affordable Price: $385,000 | Monthly Payment: $2,700 | Loan: $345,000 | Total Interest: $440,000 | A typical first-time homebuyer scenario with modest income and down payment; 30-year term keeps payment manageable |
| Income: $150,000 | Debts: $800 | Down: $100,000 | Rate: 5.5% | Term: 25 years | Tax: 1.2% | Insurance: $1,500 | DTI: 36% | Affordable Price: $680,000 | Monthly Payment: $4,100 | Loan: $580,000 | Total Interest: $320,000 | Higher income and larger down payment unlock higher price range; shorter term reduces total interest significantly |
| Income: $120,000 | Debts: $1,200 | Down: $50,000 | Rate: 7% | Term: 20 years | Tax: 1.5% | Insurance: $1,400 | DTI: 36% | Affordable Price: $380,000 | Monthly Payment: $3,200 | Loan: $330,000 | Total Interest: $240,000 | Existing debts reduce available mortgage budget; shorter term and higher rate elevate monthly cost despite lower price |
DTI is the percentage of your gross monthly income that goes toward debt payments. Lenders typically cap mortgages at 43% DTI; some allow up to 50%. A higher DTI means a smaller mortgage budget because more of your income is already committed to other debts. Paying off car loans or credit cards before applying for a mortgage immediately increases your home-buying power.
Conventional wisdom suggests 20% to avoid private mortgage insurance (PMI), but 10–15% is common for first-time buyers. FHA loans allow 3.5% down. A larger down payment lowers your monthly payment and total interest significantly. If you have $40k saved and the home is $350k, a 20% down ($70k) reduces your loan and payment versus putting down only $40k.
Principal is the original loan amount you borrowed. Interest is what the lender charges for the loan, calculated monthly on the remaining balance. Property taxes are levied by your local government annually (often 0.5–2% of home value). Insurance protects the lender's interest in the home. Your monthly payment includes all four; this calculator breaks them down so you see the total.
Property tax rates are set by local governments and fund schools, roads, services, and infrastructure. States and counties have vastly different rates—from under 0.5% in some states to 2%+ in others. A $400k home in a 0.8% tax area costs $3,200/year in tax; in a 2% area, it costs $8,000/year. Always research local tax rates when house hunting.
A 15-year mortgage builds equity faster and costs far less in total interest, but monthly payments are typically 40–60% higher. A 30-year mortgage has lower monthly payments, giving you more cash flow for emergencies or other goals. Choose based on your monthly budget and comfort level; many people refinance from 30-year to 15-year once they earn more or pay down other debt.
Reduce or eliminate existing debts before applying for a mortgage. Paying off a $500 car payment immediately frees up that amount for a mortgage payment under DTI rules, potentially increasing your home budget by $80k–$120k. Alternatively, increase your income, save a larger down payment, or wait for interest rates to drop.