Home Affordability Calculator
Find out exactly how much house you can afford
Before you start house hunting, it's essential to know your budget. Our home affordability calculator analyzes your income, debts, and down payment to determine the maximum home price you can comfortably afford. Compare different loan types, see your monthly payment breakdown, and understand how DTI ratios affect your options.
Open Source & Transparent
All calculations are open source and verifiable on GitHub. We believe in transparency and welcome contributions to improve our tools.
Based on your income and debts
You Can Afford a Home Up Togood
$345,000
Loan Amount
$285,000
Monthly Payment
$2,326
Down Payment
$60,000 (17.4%)
Choose Your Loan Type
Your Financial Details
Monthly: $8,333
Car loans, student loans, credit cards, etc.
17.4% of max home price
Current market rates: 6.0% - 7.5%
DTI Analysis
Front-End DTI (Housing Only)
2790.0%
Limit: 2800.0% for conventional
Back-End DTI (Total Debt)
3390.0%
Limit: 3600.0% for conventional
Your debt-to-income ratios are within acceptable limits for this loan type.
Cash Needed at Closing
Quick Summary
Recommendations
- Consider saving for a 20% down payment ($69,000) to avoid PMI and get better rates.
DTI Limits by Loan
Front-end = housing only. Back-end = all debts.
Understanding Home Affordability
Home affordability is determined by several factors including your income, existing debts, down payment, credit score, and current interest rates. Lenders use specific ratios called debt-to-income (DTI) ratios to determine how much you can borrow safely.
Our calculator uses industry-standard DTI limits and accounts for all housing costs including principal, interest, property taxes, homeowners insurance, PMI (if applicable), and HOA dues to give you an accurate picture of what you can afford.
The 28/36 DTI Rule
The 28/36 rule is the standard lenders use for conventional mortgages:
28%
Front-End Ratio
Housing costs (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income.
36%
Back-End Ratio
Total monthly debt payments (housing + other debts) should not exceed 36% of gross income.
Note: FHA loans allow 31/43 ratios, and VA loans use residual income calculations with a 41% guideline.
Loan Types Compared
| Feature | Conventional | FHA | VA |
|---|---|---|---|
| Minimum Down Payment | 3% | 3.5% | 0% |
| Minimum Credit Score | 620+ | 580+ | No minimum* |
| Front-End DTI Limit | 28% | 31% | 41%* |
| Back-End DTI Limit | 36% | 43% | 41%* |
| Mortgage Insurance | PMI if <20% down | MIP for life of loan | None (funding fee) |
| Best For | Good credit, 5%+ down | Lower credit, first-time buyers | Veterans & military |
* VA loans use residual income calculation rather than strict DTI limits. The 41% is a guideline, not a hard limit.
Understanding PMI
Private Mortgage Insurance (PMI) is required on conventional loans when your down payment is less than 20% of the home price. It protects the lender in case you default.
How Much Does PMI Cost?
- • 0.5% - 1.5% of loan amount annually
- • $50 - $400 per month on average
- • Lower rates with higher credit scores
- • Lower rates with larger down payments
When Does PMI End?
- • Automatically removed at 78% LTV
- • Can request removal at 80% LTV
- • Based on original or current value
- • FHA MIP lasts the life of the loan
Tip: Our calculator factors PMI into your maximum affordable home price, showing the true impact on your monthly payment and buying power.
Quick Rules of Thumb
2.5-3x
Income Multiple
Home price should be 2.5-3x your annual gross income
20%
Ideal Down Payment
Avoids PMI and typically gets better rates
3-5%
Closing Costs
Budget 3-5% of home price for closing costs
What's Included in Your Monthly Payment
Principal & Interest
The portion that pays down your loan balance and interest to the lender. This is the largest component of your payment and is fixed for the life of the loan with a fixed-rate mortgage.
Property Taxes
Local taxes based on your home's assessed value. Typically 1-2% of home value annually, varies by location. Usually paid through escrow as part of your monthly mortgage payment.
Homeowners Insurance
Protects your home and belongings from damage, theft, and liability. Required by lenders. Typically 0.25-0.5% of home value annually, varies by location and coverage.
PMI / Mortgage Insurance
Required with less than 20% down on conventional loans. Protects the lender if you default. Can be removed once you reach 20% equity. FHA loans have MIP for the life of the loan.
Common Home Buying Mistakes
- ✗ Maxing out your budget: Just because you qualify doesn't mean you should buy at your maximum. Leave room for savings and unexpected expenses.
- ✗ Forgetting closing costs: Budget 3-5% of the home price for closing costs in addition to your down payment.
- ✗ Ignoring future expenses: Maintenance, repairs, and furnishing a home can add thousands per year to your housing costs.
- ✗ Not shopping for rates: Even a 0.25% difference in rate can save tens of thousands over the life of your loan.
- ✗ Skipping pre-approval: Get pre-approved before house hunting to know your true budget and strengthen your offers.
Frequently Asked Questions
How much house can I afford on $100,000 salary? ▼
With a $100,000 salary and following the 2.5-3x rule, you could afford a home between $250,000-$300,000. However, the actual amount depends on your debts, down payment, interest rate, and location. Using the 28/36 rule with no other debts, you could afford approximately $2,333/month in housing costs, which translates to roughly $350,000-$400,000 home with 20% down.
What credit score do I need to buy a house? ▼
For conventional loans, most lenders require a minimum credit score of 620, though 740+ gets the best rates. FHA loans accept scores as low as 580 with 3.5% down (500-579 requires 10% down). VA loans have no official minimum, but most lenders want 620+. Higher credit scores also mean lower PMI rates.
Should I buy a house with less than 20% down? ▼
It depends on your situation. Putting less than 20% down means paying PMI, but it can make homeownership accessible sooner. If you have stable income, emergency savings, and home prices are rising in your area, buying with less down can make sense. However, if you'd deplete all savings for the down payment, it's better to wait.
How do interest rates affect home affordability? ▼
Interest rates significantly impact affordability. For every 1% increase in rates, your buying power decreases by roughly 10%. For example, at 6% you might afford a $400,000 home, but at 7% that drops to about $360,000. Use our calculator's interest rate slider to see how rate changes affect your maximum home price.
What's the difference between pre-qualification and pre-approval? ▼
Pre-qualification is an informal estimate based on self-reported information—like what our calculator provides. Pre-approval is a formal process where a lender verifies your income, assets, and credit to provide a specific loan amount. Pre-approval is stronger when making offers and is typically valid for 60-90 days.
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