Home Affordability Calculator
Turn the debt-to-income limit your lender gave you into a maximum price.
Result
Maximum price: $396,765.40Estimate
The limit is the one you entered. Lenders apply their own overlays on top of a stated ratio, so a number that fits here can still be declined.
- Maximum loan
- $356,765.40Estimate
- Monthly principal and interest
- $2,255.00Estimate
- Total monthly housing payment
- $2,775.00Estimate
- Monthly debt ceiling at that limit
- $3,225.00Estimate
https://calcgallery.com/finance/home-affordability-calculator/
Results are arithmetic estimates based on the values you enter. Rates, fees and terms are set by your lender or provider, and your actual agreement controls what you pay or receive. Confirm important figures with them or with a qualified adviser. Read the full disclaimer
How to use the Home Affordability Calculator
- Enter your gross monthly income, before tax and other deductions.
- Enter the debt-to-income limit your lender told you they apply. This page does not supply one.
- Add your other monthly debt payments, the rate and term you have been quoted, your down payment, and the monthly tax, insurance and HOA.
The limit is yours, not ours
Every affordability calculator has to answer one question before it can answer yours: what ratio of income to debt counts as acceptable? Most answer it silently, picking a threshold and presenting the result as though it were a fact about you.
This one asks you instead. The debt-to-income limit is an input, because it is a policy your lender sets, not arithmetic anyone can derive. Different lenders apply different limits to the same borrower, and the same lender applies different limits to different loan types.
ceiling = gross monthly income x the limit you enteredhousing budget = ceiling - other monthly debt paymentsprincipal+interest = housing budget - tax, insurance and HOAmaximum loan = the loan that payment supports at your rate and termmaximum price = maximum loan + down paymentNothing above involves a number this site chose.
Working backwards from the payment
The last step is the mortgage payment formula run in reverse. Given a payment, a rate and a term, there is exactly one loan size that amortises to zero, and that is the present value of the payments as an annuity.
This is why a small change in the rate moves the maximum price so much. The payment ceiling is fixed by your income and debts; the rate decides how much loan that fixed payment buys. Lowering the rate by one point on a thirty-year term buys roughly a tenth more house for the same monthly outlay, which is a larger effect than most people expect.
Term works the same way and in the same direction, with the difference that a longer term buys more house by charging far more interest across the life of the loan.
When the answer is nothing
If your other debt payments and monthly escrow already reach the limit you entered, there is no room left for principal and interest. The page says so and reports the down payment as the maximum price, because that is literally what you could buy outright.
That result is not a verdict on you. It usually means the limit entered was a strict one, or that clearing a car loan would change the picture considerably. Try the same figures with one debt removed to see how much of the ceiling it was occupying.
What this does not decide
It does not say whether you qualify, whether you should borrow the maximum, or whether the maximum is a sensible place to buy. Borrowing to a lender’s ceiling leaves no margin for a rate change at renewal, a repair, or a period without income.
It also does not model mortgage insurance, which many lenders require below a certain down payment and which comes out of the same monthly budget, or closing costs, which come out of the same cash as the down payment. Both reduce the real figure. Treat the number here as an upper bound on a stated policy, not a target.
With your numbers
- A 43% limit on $7,500.00 a month allows $3,225.00 of total debt payments
- After $450.00 of other debt and $520.00 of tax, insurance and HOA, $2,255.00 is left for principal and interest
- At 6.5% over 30 years that payment supports a loan of $356,765.40
- Adding the $40,000.00 down payment gives a maximum price of $396,765.40
Quick reference
The limit is the one you entered. Lenders apply their own overlays on top of a stated ratio, so a number that fits here can still be declined.
| Example | Maximum price |
|---|---|
| 7,500 income, 43% limit, 6.5% over 30 years | $396,765.40 |
| Same income at a stricter 36% limit | $313,704.72 |
| Same income with no other debt | $467,960.27 |
| Lower rate at 5.5% | $437,154.58 |
| 15-year term instead of 30 | $298,865.91 |
| 5,000 income, 20,000 down | $249,405.69 |
| 12,000 income, 120,000 down | $712,804.62 |
| Debt already at the ceiling | $10,000.00 |
| EUR 6,000 income, 40% limit | €384,710.07 |
| EUR 9,000 income, 20-year term | €489,517.92 |
Common questions about the Home Affordability Calculator
- What debt-to-income limit should I use?
- The one your lender gave you. Limits vary by lender, loan type and the rest of your application, and this page deliberately does not suggest a figure. If you have not been given one, ask before relying on any number here.
- Is this a pre-approval?
- No. It is arithmetic on numbers you entered. It says nothing about whether any lender will lend to you, and a figure that fits here can still be declined.
- Why does it ask for tax, insurance and HOA separately?
- Because lenders count them inside the housing payment, not on top of it. Leaving them out would overstate what is left for principal and interest, and so overstate the price.
- Why is my maximum price zero?
- Because your other debt payments and monthly escrow already reach the limit you entered, leaving nothing for a mortgage payment. The page reports that rather than showing a negative price.
- What is not included?
- Mortgage insurance, closing costs, maintenance, and any lender overlay beyond the stated ratio. It also takes no view on whether borrowing the maximum is wise.