Home Affordability Calculator

Precision Finance / Real Estate

Calculate Maximum Home Price

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Lender Guidelines
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Multiple Methods
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Completely Free
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28% of gross income for housing
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36% of gross income minus debt
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Conservative estimate (safer)
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Principal, interest, tax, insurance
⚠️ Disclaimer: This calculator provides estimates based on standard lending guidelines. Actual approval depends on credit score, debt-to-income ratio, employment history, and lender requirements. Consult a mortgage lender for accurate pre-approval.
Last updated: April 19, 2026

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📋 What to Do Next:

  1. Get pre-approved: Contact mortgage lenders for official pre-approval letter (needed to make offers)
  2. Check credit score: Higher scores get better interest rates (aim for 740+)
  3. Save down payment: 20% avoids PMI; 10-15% is common; 3-5% is minimum
  4. Find a realtor: Local expert helps navigate market and negotiate
  5. Get home inspection: Critical before closing; can identify $5K+ in repairs

Frequently Asked Questions

What's the difference between 28% and 36% rules?

28% rule: Housing costs (mortgage, tax, insurance) ≤ 28% of gross income. 36% rule: Total debt (housing + car + credit + student loans) ≤ 36% of gross income. Lenders use both—you must qualify under both rules. The 28% rule is stricter for housing, protecting you from overextending on mortgage.

What if I don't have a 20% down payment?

You can put down as little as 3-5%, but you'll pay PMI (Private Mortgage Insurance)—typically 0.5-1.5% of loan annually until you have 20% equity. This adds $100-200/month to payment. Saving for 10-15% down is ideal—reduces PMI and monthly cost significantly. Consider down payment assistance programs if available in your area.

How does debt affect home affordability?

Each $1,000 of monthly debt reduces your mortgage approval by ~$200,000. High car payments, student loans, or credit cards significantly limit your home budget. Strategy: Pay off high-interest debt before buying. A $500 car payment reduces approval by ~$100,000. Eliminating it increases home budget substantially.

Should I buy the maximum I'm approved for?

No. Just because lenders approve $400K doesn't mean you should spend it. Lender approval = maximum risk; your budget should account for emergencies, maintenance (1-2% of home value annually), and life changes. A safer approach: aim for 30-year mortgage payment ≤ 25% of gross income, leaving room for other expenses.

What interest rate should I assume?

Rates change daily. Check current rates from Freddie Mac, Bankrate, or your lender. Use realistic rates (today's ~6-7% depending on market). For planning, add 0.5-1% buffer to prepare for potential rate increases. Even 0.5% difference = $100-150/month on $300K loan. Lock rate when applying for pre-approval.

Does this calculator include all homeownership costs?

No. This shows mortgage payment + property tax + insurance estimates. Budget also includes: maintenance (1-2% annually), utilities, homeowners insurance, HOA fees (if applicable), capital improvements. Total housing cost typically 30-40% of gross income including all expenses. This calculator shows the mortgage component primarily.