See how large a mortgage you can qualify for. This free mortgage affordability calculator applies lenders’ 28/36 DTI ratios to your income and debts to find your maximum loan and payment.
Estimate based on the 28/36 rule. Lenders also weigh credit, employment and reserves.
How the Mortgage Affordability Calculator Works
Mortgage affordability comes down to how much of your monthly income lenders will let you put toward housing costs. This calculator applies the classic 28/36 rule — capping your payment at 28% of gross monthly income, or 36% once existing debts are counted — then works backward to figure out the loan and home price that payment supports.
Formula: Max Monthly Payment = min(28% × Monthly Income, 36% × Monthly Income − Monthly Debts); Loan Amount = (Max Payment − Taxes & Insurance) × [1 − (1+r)^-n] ÷ r; Affordable Price = Loan Amount + Down Payment, where r is the monthly interest rate and n is the total number of monthly payments.
- Annual household income — your total gross yearly income before taxes, divided by 12 to get monthly income
- Monthly debts — existing recurring debt payments (credit cards, auto loans, student loans) used to test the 36% back-end limit
- Down payment — the cash you plan to put down upfront, added to the loan amount to get your affordable price
- Interest rate — the annual mortgage interest rate, converted to a monthly rate (r) for the loan formula
- Tax + insurance / mo — estimated monthly property tax and homeowners insurance, subtracted from your max payment before the loan is calculated
- Loan term — repayment length (30, 20, or 15 years), which sets n, the number of monthly payments
Example Scenarios
| Annual Income | Monthly Debts | Down Payment | Rate | Term | Affordable Home Price |
|---|---|---|---|---|---|
| $60,000 | $0 | $20,000 | 6.0% | 30 yr | ~$203,000 |
| $90,000 | $300 | $40,000 | 6.5% | 30 yr | ~$309,000 |
| $120,000 | $500 | $60,000 | 7.0% | 15 yr | ~$316,000 |
| $50,000 | $600 | $10,000 | 6.0% | 30 yr | ~$118,000 |
| $75,000 | $0 | $15,000 | 5.5% | 20 yr | ~$219,000 |
Mortgage Affordability Calculator FAQ
What is the 28/36 rule this calculator uses?
It’s a lending guideline capping housing costs at 28% of gross monthly income (front-end ratio) and total debts including housing at 36% (back-end ratio). This calculator takes whichever of the two limits is lower as your realistic maximum payment.Why did my result use the 36% limit instead of 28%?
When you have little or no monthly debt, the 28% front-end limit is usually the tighter cap. But if you carry car loans, student loans, or credit card payments, the 36% back-end limit (which subtracts those debts) can become the smaller — and binding — number instead.Does this calculator include private mortgage insurance (PMI)?
Not separately. PMI typically applies when your down payment is under 20% of the home price, and it isn’t broken out as its own field here. If you expect to pay PMI, add a rough estimate into the “tax + insurance” field so it’s reflected in your max payment.How much does a bigger down payment increase what I can afford?
Your down payment is added directly to the loan amount the calculator computes, dollar for dollar, since it doesn’t change your monthly payment capacity. A larger down payment raises your affordable home price without requiring more monthly income.Why does choosing a 15-year term instead of 30 years lower my affordable price?
A shorter term means more principal is repaid each month, so the same maximum monthly payment supports a smaller loan. You’ll see a materially lower “affordable home price” at 15 years even though the interest rate field stays the same.Does the result account for property taxes and insurance?
Yes — whatever you enter in the “tax + insurance per month” field is subtracted from your maximum payment before the remainder is used to size the loan, so higher taxes and insurance reduce your affordable loan amount.Related Calculators
Once you know your affordable price range, you can work out the actual monthly mortgage payment for a specific loan amount, check your debt-to-income ratio before you apply for financing, or budget ahead using a closing cost estimate for your purchase.