Menu

Home planning

Home affordability calculator

See what may fit your monthly finances—not only what a borrowing limit could permit.

This is an educational estimate, not a mortgage approval, lender quote, or advice. It does not use live rates, and your inputs are calculated in this browser.

Your assumptions

The starting rate and ownership costs are editable examples, not live quotes or location-specific recommendations.

Basic inputs
Include only income you reasonably expect to continue.
Recurring loan, minimum card, child-support, and alimony payments; exclude housing and ordinary living costs.
Covers the down payment and closing costs.
Annual nominal rate. The 6.5% default is an example, not a live quote.
Choose the fixed loan term you want to model.
Paid from cash and not financed in this model.
Use a location-specific estimate. Example only: 1.2%.
Use a property-specific annual estimate. Example only: $1,800.
Converted to a monthly allowance for routine maintenance and repairs.
Advanced assumptions
Private mortgage insurance (PMI)
Comfortable target and estimated maximum

DTI targets are editable educational rules of thumb, not lender approval criteria.

How to use this affordability estimate

Start with gross household income, required monthly debt payments, cash available, a mortgage rate you want to evaluate, and the intended loan term. Then open advanced assumptions and enter property tax and homeowners insurance estimates appropriate to the location and property type.

The displayed range runs from the conservative estimate to the comfortable estimate, while the estimated maximum uses higher DTI caps. None is an approved amount. Compare the modeled payment with ordinary expenses not included here, such as utilities, maintenance, transportation, food, childcare, and savings goals.

How the calculation works

For gross monthly income I, monthly debt D, front-end target F, and back-end target B:

front-end limit = I * F
back-end limit  = I * B - D
housing budget  = max(0, min(front-end limit, back-end limit))

The model uses a bounded binary search because down payment, closing costs, tax, insurance, PMI, and the payment can all depend on price. Cash remaining after closing costs funds the down payment, capped at 20% of the home price.

Worked example

With $120,000 annual income and $500 monthly debt, gross monthly income is $10,000. A 28% front-end target allows $2,800 for housing. A 36% back-end target allows $3,100 after debt ($10,000 x 36% - $500), so the $2,800 front-end amount binds before property assumptions are solved into a home price.

Assumptions and limitations

  • The loan is a conventional fixed-rate mortgage with level initial tax, insurance, HOA, and PMI estimates.
  • Closing costs are paid from available cash and are not financed. The modeled down payment is capped at 20% of the home price.
  • PMI applies initially when loan-to-value exceeds the entered threshold; cancellation timing is not modeled here.
  • Credit, lender overlays, loan programs, location rules, appreciation, utilities, major renovations, and ordinary living expenses are excluded.
  • Displayed values are rounded, but calculations use unrounded values. Actual rates, taxes, premiums, and fees may differ.

Read the full mortgage affordability methodology.

Frequently asked questions

Does this tell me what a lender will approve?

No. Approval can depend on credit, verified income, assets, loan program, lender rules, and other factors this educational model does not evaluate.

What debts should I include?

Include required recurring payments such as auto, student, personal-loan, minimum credit-card, child-support, and alimony payments. Exclude the proposed housing payment and ordinary living expenses.

Why is cash the binding constraint?

The model pays closing costs from available cash and uses up to 20% of the home price as the down payment. Percentage-based closing costs can set a price ceiling when available cash is limited.

Why do I need local tax and insurance estimates?

These costs vary materially by location and property. The site does not perform location lookups or present a generic amount as if it were current.

Glossary

Front-end DTI
Monthly housing cost divided by gross monthly income.
Back-end DTI
Monthly housing cost plus recurring monthly debt, divided by gross monthly income.
Loan-to-value (LTV)
Loan amount divided by home price.
PMI
Private mortgage insurance, which may apply to a conventional loan with a higher LTV.
Binding constraint
The modeled cash or DTI limit that prevents a higher home price.

Investment returns

Explore how contributions, fees, inflation, and return assumptions affect long-term value.

Model investment returns