Mortgage Affordability Calculator: How Much House Can I Afford?

This calculator estimates the highest home price that keeps your monthly housing cost within the debt-to-income limits lenders traditionally use: housing costs no more than 28% of gross monthly income, and all debts including the mortgage no more than 36%. It works backwards from that payment, counting principal, interest, property tax, insurance, HOA dues and PMI.

How to use this tool

1. Enter your gross yearly income and the monthly payments on your other debts.
2. Enter the cash you can put down and the interest rate you expect.
3. Adjust property tax, insurance, HOA and PMI to match the area you are shopping in.
4. Keep the 28/36 limits or change them to match a lender's rules.

Formula

Max payment = min(Income ÷ 12 × 28%, Income ÷ 12 × 36% − Debts)

Price = (Max payment − Insurance − HOA + Down × k) ÷ (k + Annual tax rate (decimal) ÷ 12)

k is the monthly payment per dollar borrowed, r ÷ (1 − (1 + r)^−n), with r the monthly rate and n the number of payments. PMI, when it applies, is added to k. The price is the one whose full monthly cost exactly equals the allowed payment.

Example

With $100,000 of income and $500 of other debt payments, 28% of monthly income ($2,333.33) is lower than 36% minus debts ($2,500), so housing is capped at $2,333.33 a month. With $60,000 down at 6.5% for 30 years, 1.1% property tax, $1,800 a year of insurance and 0.5% PMI, the maximum price is about $338,068: a $278,068 loan costing $1,757.58 in principal and interest, plus $309.90 tax, $150 insurance and $115.86 PMI.