Home Affordability Calculator
Estimate how much house you can afford based on income and debts.
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What is Home Affordability?
Home affordability is the maximum home price you can comfortably afford based on your income, existing debts, down payment, and current mortgage rates. Lenders use the 28/36 rule to determine how much they'll lend you, but your personal affordability may be lower depending on other financial goals.
The 28/36 Rule Explained
The 28/36 rule is a lending guideline: your housing costs (PITI) should not exceed 28% of gross monthly income, and total debt payments should not exceed 36%. Example: $6,000/month income → max housing: $1,680/month, max total debt: $2,160/month. If you have $400/month in other debts, your housing budget is $1,760 (limited by the 36% total).
How to Calculate Your Home Budget
- •Step 1: Calculate 28% of gross monthly income (max housing cost). Step 2: Subtract existing monthly debt payments from 36% of income (remaining for housing). Step 3: Use the lower of these two figures. Step 4: Subtract estimated property taxes, insurance, and PMI to find your max mortgage payment. Step 5: Use a mortgage calculator to find the corresponding home price.
Factors That Affect Affordability
Income: higher income = higher affordability. Debts: more debts = lower affordability. Down payment: larger down payment = higher home price and lower monthly cost. Credit score: better score = lower interest rate = higher affordability. Mortgage rates: lower rates = higher affordability. Property taxes: higher taxes = lower affordability.
Common Affordability Mistakes
Borrowing the maximum the lender approves (leaves no room for savings or emergencies). Not factoring in property taxes and insurance (can add 30-50% to your mortgage payment). Ignoring maintenance costs (budget 1-2% of home value annually). Not considering HOA fees. Buying at the top of your budget (leaves no flexibility for life changes).
Comparison Analysis
Affordability by Income ($60,000-$120,000 annual, 20% down, 6.5% rate)
| Criteria | $60,000/yr | $80,000/yr | $100,000/yr | $120,000/yr |
|---|---|---|---|---|
| Monthly Gross | $5,000 | $6,667 | $8,333 | $10,000 |
| Max Housing (28%) | $1,400 | $1,867 | $2,333 | $2,800 |
| Est. Home Price | ~$200,000 | ~$270,000 | ~$340,000 | ~$410,000 |
| Down Payment (20%) | $40,000 | $54,000 | $68,000 | $82,000 |
Content Verification
Expert Review
Reviewed by Omar Farooq, CFA, Certified Mortgage Planning Specialist
Authoritative Sources
Based on CFPB guidelines, FHA lending standards, and established mortgage affordability calculations
Last Reviewed
Content verified May 2026 against current mortgage rates and lending standards