Home-affordability calculator to find the maximum home price you can responsibly afford based on income and finances.
Four tabs: 28/36 rule (housing & total debt limits), DTI method (front-end / back-end), stress test (rates +2% / income -10%), and hidden costs (property tax, insurance, maintenance, HOA).
Disclaimer: Conservative assumptions. Consult a financial advisor for holistic planning.
Calculator information
📋 How to use this calculator
- Enter your gross monthly income (before tax) from all sources: salary, average bonus, rental income, freelance work.
- Note other monthly debts: credit card minimum payments, auto loans, personal loans, student loans.
- Enter the down payment amount you have saved; the conventional standard is 20% (LTV 80%), though FHA loans allow as little as 3.5%.
- Enter the current mortgage interest rate (check Freddie Mac PMMS) and loan term (typically 15-30 years).
- For the stress test tab, simulate scenarios where rates rise 2% or income drops 10% to confirm the home remains affordable.
- Review the hidden costs tab: annual property taxes, homeowners insurance, HOA dues (condos), maintenance at 1% of home value/year, initial repairs.
- Compare the 28/36 rule result with the CFPB qualified mortgage back-end DTI limit (maximum 43%) to confirm eligibility.
🧮 28/36 Rule and Maximum Affordable Price
Max_PITI = 0.28 x Gross_income; Max_total_debt = 0.36 x Gross_income
- PITI = Principal + Interest + Taxes (property tax) + Insurance
- Front-end ratio (housing): not more than 28% of gross income
- Back-end ratio (total debt): not more than 36% of gross income (CFPB QM rule: up to 43%)
- Max home price ~= (Max_PITI - Tax - Insurance) converted to principal via term & rate
- Max_principal = PMT / (i x (1+i)^n / [(1+i)^n - 1])
The CFPB Qualified Mortgage rule caps back-end DTI at 43% for most loans. Lenders typically prefer 36% or lower for the best rates. Include 2-5% in closing costs (origination, title, appraisal, recording fees) that generally cannot be financed.
💡 Worked example: Married couple with combined household income of $9,000/month
Given:- Combined income: $9,000/month
- Other debts: auto loan $400/month, credit cards $100
- Down payment available: $60,000
- Mortgage rate: 6.5% fixed, 30-year term
- Property tax + insurance estimate: $450/month
Steps:- Max housing payment = 28% x $9,000 = $2,520/month.
- Max total debt = 36% x $9,000 = $3,240; available $3,240 - $500 = $2,740 for housing (front-end is tighter).
- Use $2,520 - $450 (tax + insurance) = $2,070 available for principal and interest.
- Monthly rate i = 6.5%/12 = 0.5417%; n = 360 months.
- Max_principal = $2,070 / [0.005417 x (1.005417)^360 / ((1.005417)^360 - 1)] = $2,070 / 0.006320 = $327,500.
- Max home price = $327,500 + $60,000 down payment = $387,500.
Result: This couple can afford a home up to about $387,500 with a $2,070/month P&I payment. After a stress test with rates rising to 8.5%, payment becomes ~$2,520, still within front-end limits. Reserve about $10,000-15,000 for closing costs (typically 2-5% of loan amount).
❓ Frequently asked questions
What is the minimum down payment for a US mortgage?
It depends on the loan program: conventional loans require as little as 3% (first-time buyers) or 5% standard; FHA loans 3.5% with a 580+ FICO; VA and USDA loans 0% for eligible borrowers; jumbo loans typically 10-20%. Putting down less than 20% on a conventional loan triggers private mortgage insurance (PMI), which adds 0.5-1.5% of the loan amount annually. A larger down payment means lower monthly payments and often a better rate because the lender's risk is reduced.
What is the difference between fixed-rate and adjustable-rate mortgages?
Fixed-rate mortgage (FRM): the interest rate stays the same for the entire term (15, 20, or 30 years); payments are predictable. Adjustable-rate mortgage (ARM): a fixed introductory rate for 5, 7, or 10 years (5/1, 7/1, 10/1 ARM) then adjusts annually based on an index (SOFR) plus margin. ARMs typically start 0.5-1% below FRMs but carry rate-reset risk. Most US borrowers choose 30-year fixed for stability; ARMs make sense only if you plan to sell or refinance before the reset.
Does my credit score affect mortgage approval?
Significantly. Lenders pull FICO scores from Equifax, Experian, and TransUnion and use the middle score. Score brackets: 760+ best rates; 700-759 strong; 660-699 acceptable with slightly higher rates; 620-659 limited to FHA/VA at elevated rates; below 620 most conventional loans denied. Clear delinquencies at least 12 months before applying. Pay down credit card balances to keep utilization under 30% of available credit, and avoid opening new accounts in the 6 months before applying.
What if I fail the 28/36 rule?
Four strategies: (1) increase the down payment to reduce loan principal; (2) extend the term from 15 to 30 years (lower monthly payment, more total interest); (3) pay off auto loans or credit cards first to lower back-end DTI; (4) add a co-borrower (spouse or partner) to combine incomes. Do not stretch into house-poor territory - spending more than 35-40% of income on housing alone causes long-term financial stress.
What hidden costs are most often overlooked?
Seven common surprises: (1) closing costs 2-5% of loan amount (origination, title, appraisal, recording); (2) property taxes 0.5-2.5% of home value annually depending on state; (3) homeowners insurance $800-2,500/year; (4) HOA dues $100-500/month for condos or planned communities; (5) PMI 0.5-1.5% annually if down payment under 20%; (6) initial repairs and furnishings; (7) maintenance reserve at about 1% of home value per year. Total can run 8-15% over the purchase price within the first 12 months.
📚 Sources & references
Last updated: May 11, 2026