Mortgage Affordability Calculator
Determine how much house you can afford based on your income and expenses
About This Calculator
The Mortgage Affordability Calculator determines how much house you can afford based on your income, debts, and down payment. It uses the 28% rule, a standard guideline that suggests housing costs should not exceed 28% of your gross monthly income.
How It Works
- 1
Enter your annual gross income before taxes and deductions.
- 2
Input your total monthly debt payments (credit cards, car loans, student loans, etc.).
- 3
Specify how much you have saved for a down payment.
- 4
Provide the expected interest rate and loan term.
- 5
The calculator uses the 28% rule (housing should not exceed 28% of gross monthly income) to determine affordability.
Formula Explanation
Max Monthly Payment = (Annual Income ÷ 12) × 0.28 - Monthly DebtsThe calculator first calculates your maximum affordable monthly payment using 28% of your gross monthly income, then subtracts your existing monthly debt payments. This payment is then used to calculate the maximum loan amount you can afford.
Affordable Home Price = Loan Amount + Down PaymentThe maximum affordable home price is the sum of the loan amount you can qualify for plus your available down payment.
Tips
The 28% rule is a guideline - your actual affordable amount depends on your full financial picture.
Don't forget to budget for closing costs, moving expenses, and home maintenance.
Consider your emergency fund - don't use all savings for the down payment.
Factor in property taxes and insurance, which vary significantly by location.
Common Uses
Pre-Approval Preparation
Get an estimate of how much you can afford before talking to lenders.
Budget Planning
Plan your monthly budget to ensure you can comfortably afford homeownership.
Down Payment Strategy
Determine how much you need to save for a down payment to reach your home price goal.
Debt Management
See how reducing monthly debts can increase your affordable home price.