Enter your annual household income, monthly debt payments, down payment cash, and mortgage interest rate to estimate the maximum home price you can comfortably afford.
How to use this calculator
Enter your total combined pre-tax annual household income.
Enter your recurring monthly debt obligations (car loans, student loans, credit card minimums).
Enter the cash savings you have reserved for a down payment.
Adjust expected mortgage interest rates, property tax rates, and home insurance.
Read your maximum affordable home purchase price, max loan amount, and recommended monthly PITI budget.
Formula & method
28/36 Underwriting Affordability Equations
Front-End PITI = 0.28 × Income_monthly · Back-End PITI = 0.36 × Income_monthly − Debt_monthly · Max Home Price = [ (PITI_allowed − Ins_monthly) + Down × k ] ÷ (k + Tax_rate_monthly)
k = monthly mortgage principal & interest factor = r(1+r)^n / [(1+r)^n - 1].
Example
$100,000 income, $500 monthly debt, $60,000 down payment @ 6.5% interest → Max Home Price: ~$376,000 (Max PITI: $2,333/mo).
Key insights
Lenders use the 28/36 rule: total housing costs (PITI) shouldn't exceed 28% of gross income, and total debt (housing + existing debt) shouldn't exceed 36%.
Existing monthly debt reduces home buying power significantly; every $100 in existing monthly debt reduces home affordability by ~$15,000.
Making a 20% down payment eliminates private mortgage insurance (PMI), keeping monthly payments lower.
In addition to down payment cash, homebuyers should reserve 2% to 5% of the purchase price for closing costs and emergency reserves.
How to interpret your result
Maximum Home Purchase Price
The upper price ceiling calculated under standard conservative 28/36 underwriting standards.
Max Monthly PITI Budget
Includes Principal, Interest, Property Taxes, and Homeowner's Insurance in a single monthly housing figure.
Back-End DTI Ratio
The percentage of gross income allocated toward all total debt payments combined.
Frequently asked questions
What is the 28/36 rule for home affordability?
The 28/36 rule states that you should spend no more than 28% of your gross monthly income on housing, and no more than 36% on total debt payments.
How much house can I afford on a $100,000 salary?
With a $100k salary, $60k down payment, and low existing debt ($500/mo), you can typically afford a home priced around $370,000 to $400,000.
Does a higher down payment increase how much house I can afford?
Yes, every extra dollar in down payment directly increases purchase price while lowering your loan-to-value (LTV) ratio.
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