Mortgage Affordability Calculator — How Much House Can I Afford

Mortgage affordability is the process lenders use to answer a very specific question: given your income and existing debts, how large a monthly housing payment can you reasonably take on? It is different from asking how much you personally feel comfortable spending — affordability calculations are built around standardized debt-to-income (DTI) guidelines that lenders use to keep default risk manageable across their loan portfolio.

The most widely cited version of this guideline is the 28/36 rule, which caps your housing payment at 28% of gross monthly income (the front-end ratio) and your total debt payments, housing included, at 36% of gross monthly income (the back-end ratio). Because the back-end ratio also has to make room for whatever other debts you're already carrying, a borrower with significant car loan or student loan payments will typically qualify for less mortgage than someone with an identical income but no other debt.

This calculator applies both limits and uses whichever one is more restrictive for your numbers, then converts that maximum monthly payment into a maximum loan amount and maximum home price. If you already know the specific home price and loan terms you're considering, our mortgage calculator works in the opposite direction — from a known price to a monthly payment.

Enter your annual gross income (before taxes), your combined monthly payments on other debts (car loans, student loans, credit cards, and similar), the down payment you have available, the interest rate and loan term you expect, and the two DTI guideline percentages.

The front-end and back-end percentages default to the standard 28% and 36% used across most conventional lending guidance, but both are adjustable. If you're exploring an FHA, VA, or other loan program known to allow a higher back-end ratio, raise the back-end percentage to see how that changes your maximum. If you want a more conservative, self-imposed limit below what a lender might technically approve, lower either percentage.

The calculator shows your maximum monthly housing payment, the maximum loan amount that payment supports at your chosen rate and term, and the maximum home price once your down payment is added back in — along with a note on which of the two guidelines (front-end or back-end) is actually the binding constraint for your situation.

First, the calculator finds your maximum monthly housing payment: Max Monthly Housing Payment = min(Front-End % × Monthly Gross Income, Back-End % × Monthly Gross Income − Monthly Other Debts). Taking the minimum of the two ensures neither guideline is violated — whichever number is smaller is the true ceiling.

Next, that monthly payment is converted into a maximum loan amount using the amortization formula rearranged to solve for principal: Max Loan Amount = M × [(1 + r)^n − 1] / [r × (1 + r)^n], where M is the max monthly housing payment, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly payments (loan term in years × 12). This is exactly the reverse of the standard payment formula used in our mortgage calculator.

Finally: Max Home Price = Max Loan Amount + Down Payment Available. Your down payment doesn't affect your monthly payment capacity at all — it only affects the total price of home that capacity can be stretched to cover.

Example 1: A Typical Dual-Income Household

Annual gross income of $90,000 means monthly gross income of $7,500. With $500/month in other debts, a $40,000 down payment available, a 6.5% interest rate, and a 30-year term: the front-end limit is 28% × $7,500 = $2,100/month. The back-end limit is 36% × $7,500 − $500 = $2,200/month. The lower (and therefore binding) figure is $2,100/month. Converting that at 6.5% over 360 payments gives a max loan amount of roughly $332,243, and adding the $40,000 down payment gives a max home price of about $372,243.

Example 2: How Existing Debt Changes the Math

Keep every input from Example 1 the same, but raise monthly other debts from $500 to $1,200 (say, a car payment and student loan). The front-end limit is unchanged at $2,100/month, but the back-end limit falls to 36% × $7,500 − $1,200 = $1,500/month — now the more restrictive, binding constraint. That $600/month reduction in available housing budget lowers the max loan amount to roughly $237,317 and the max home price to about $277,317, a drop of nearly $95,000 in home-buying power purely from carrying more non-housing debt.

Example 3: Adjusting the Guideline for a More Flexible Loan Program

Using the same $90,000 income and $500 in other debts, but raising the back-end limit from 36% to 45% (typical of some FHA-style flexibility with strong compensating factors): the back-end limit rises to 45% × $7,500 − $500 = $2,875/month, while the front-end limit stays at $2,100/month as the binding constraint — front-end limits are usually the tighter one for borrowers with modest existing debt, which is exactly why this calculator lets you inspect both instead of only presenting one number.

This Is a Guideline, Not a Loan Approval

Actual mortgage approval also depends on your credit score, employment history, cash reserves, and the specific lender's overlays on top of standard guidelines. Treat this calculator's output as a planning estimate to guide your house-hunting budget, then get pre-approved by an actual lender before making offers.

Paying Down Debt First Can Raise Your Number Significantly

Because the back-end ratio subtracts your other monthly debts directly from your available housing budget, paying off or paying down a car loan or credit card before applying for a mortgage can meaningfully raise your maximum loan amount — often by a larger margin than saving the equivalent amount toward a bigger down payment.

Remember Taxes, Insurance, and PMI Live Inside the Housing Number Too

This calculator's max loan amount is derived from principal-and-interest math. In practice, a lender's front-end ratio includes property taxes, insurance, and PMI within that same 28% housing allowance, so your realistic principal-and-interest budget — and therefore your realistic loan amount for a specific home — will typically be somewhat lower than this calculator's max loan figure once those costs are carved out.

Maximum Approved Is Not the Same as Maximum Comfortable

Consider your own savings goals, job stability, and other financial priorities separately from what a lender's DTI formula technically allows. Our debt-to-income ratio calculator can help you check your current DTI directly against lender thresholds.

All content on this page is educational and does not constitute financial advice. Actual mortgage qualification depends on the specific lender, loan program, credit profile, and market conditions — consult a licensed mortgage professional before making a home-buying decision.