Home Affordability Calculator

Find out how much house you can afford based on your income, debts, down payment, and interest rate. See a full monthly payment breakdown with taxes, insurance, and PMI.

Income & Debts

Annual Gross Income ($)

$7,083.33/month gross

Monthly Debt Payments ($)

Car, student loans, credit cards, etc.

Loan Details

Down Payment ($)

20.0% of home price

Interest Rate (%)

Loan Term

Additional Costs

Property Tax Rate (%)

Annual Home Insurance ($)

Monthly HOA ($)

DTI Preference

You can afford a home up to

$300K

with $60K down (20.0%) • 30-year conservative estimate

Monthly Payment Breakdown

Principal & Interest

$1,516.96

Property Tax

$300.00

Insurance

$150.00

Total Monthly$1,966.96

Front-End DTI (Housing / Income)

27.8%

Target: 28% max

Back-End DTI (Total Debt / Income)

33.4%

Target: 36% max

Comfort Zone Meter

Moderate

Very TightStretchingModerateComfortable

Loan Amount

$240K

Total Interest (30yr)

$306K

Total Cost (30yr)

$606K

15-Year vs 30-Year Comparison

15-Year

30-Year

Monthly P&I

$2,090.66

$1,516.96

Total Monthly

$2,540.66

$1,966.96

Total Interest

$136K

$306K

Total Paid

$376K

$546K

Interest Savings

$170K

Personalized Insight

At 27.8% of your gross income going to housing, you have a healthy budget with room for savings and unexpected expenses. Switching to a 15-year mortgage would save you $169,788.39 in total interest, though your monthly payment would increase by $573.69.

How to Determine Your Home Budget

Figuring out how much house you can afford involves more than just looking at the sticker price. Start with your gross annual income, then factor in existing monthly debts like car payments, student loans, and credit card minimums. Lenders use debt-to-income (DTI) ratios to decide how much they will lend you, but the amount a bank approves is not necessarily what you should spend. A comfortable home budget leaves room for savings, emergencies, and lifestyle expenses beyond your mortgage payment.

The DTI Rule Explained

The debt-to-income ratio comes in two flavors. The front-end ratio measures what percentage of your gross monthly income goes toward housing costs alone — your mortgage principal and interest, property taxes, homeowners insurance, HOA fees, and PMI. The back-end ratio adds all other recurring debts on top of that. The conservative 28/36 rule says housing should stay under 28% and total debt under 36%. FHA guidelines allow 31/43, and some conventional lenders stretch to 35/50 for strong borrowers. This calculator lets you toggle between these profiles so you can see the range of what you might qualify for versus what is truly comfortable.

Hidden Costs of Homeownership

Beyond the mortgage payment, homeownership comes with costs that catch many first-time buyers off guard. Property taxes typically run 0.5% to 2.5% of your home's value annually and can increase over time. Homeowners insurance is required by lenders and varies by location and coverage. If your down payment is under 20%, you will pay PMI until you build sufficient equity. HOA fees can add hundreds per month in condos and planned communities. And do not forget maintenance — a common rule of thumb is to budget 1% of your home's value per year for repairs and upkeep. This calculator includes taxes, insurance, HOA, and PMI so you see the full picture before you start house hunting.

Frequently Asked Questions

How much house can I afford on my salary?+

A common guideline is the 28/36 rule: spend no more than 28% of your gross monthly income on housing costs (mortgage, taxes, insurance) and no more than 36% on total debt payments. For example, on a $85,000 salary, your max monthly housing cost would be about $1,983. This calculator factors in your specific income, debts, down payment, and local costs to give you a personalized estimate.

What is the 28/36 rule?+

The 28/36 rule is a widely used guideline for determining how much you can afford to spend on housing. The '28' means your monthly housing costs (mortgage payment, property taxes, insurance, HOA) should not exceed 28% of your gross monthly income. The '36' means your total monthly debt payments (housing costs plus car loans, student loans, credit cards) should not exceed 36% of your gross monthly income. This is the conservative approach; FHA loans allow up to 31/43, and some lenders go higher.

How much should I put down on a house?+

The traditional recommendation is 20% down to avoid Private Mortgage Insurance (PMI). However, many buyers put down less — FHA loans require as little as 3.5%, and some conventional loans allow 3-5% down. A larger down payment means lower monthly payments, less interest over the life of the loan, and no PMI. Use this calculator to see how different down payment amounts affect your affordability.

What is PMI and how do I avoid it?+

Private Mortgage Insurance (PMI) is an extra monthly fee lenders charge when your down payment is less than 20% of the home price. It typically costs 0.3% to 1.5% of the loan amount annually. You can avoid PMI by putting at least 20% down, or you can request PMI removal once you've built 20% equity in your home. Some lenders offer lender-paid PMI with a slightly higher interest rate.

How does interest rate affect how much house I can afford?+

Interest rate has a significant impact on affordability. For every 1% increase in rate on a $300,000 loan, your monthly payment increases by roughly $175-200. A higher rate means more of your payment goes to interest, reducing your buying power. Even a 0.5% difference can change your affordable home price by $20,000-$30,000. Locking in a lower rate through rate shopping or buying points can substantially increase what you can afford.

Should I get a 15-year or 30-year mortgage?+

A 30-year mortgage has lower monthly payments, giving you more flexibility and a higher affordable home price. A 15-year mortgage has higher monthly payments but a significantly lower interest rate (typically 0.5-0.75% less) and saves you tens of thousands in total interest. Choose 15 years if you can comfortably afford the higher payment and want to build equity faster. Choose 30 years if you need lower payments or want to invest the difference elsewhere.