House Affordability Calculator

Estimate the maximum home price you can afford from income, existing debts, down payment, rate, taxes, insurance, and 28/36 debt-to-income rules.

Maximum Home Price From Income and Debt Ratios

BrainyCalculators editorial insight — unique to this tool

28/36 rule: housing ≤28% gross income, total debt ≤36%. ₹1.2 lakh/month income → ~₹33,600 housing budget at 28%, translating to ~₹40–50 lakh loan at current rates depending on tenure. US FHA allows higher DTI with mortgage insurance.

When to use this calculator

Use as buyer to cap home search price. For rent budget as tenant, use Rent Affordability.

Reference	Value	Context
28% housing ratio	Of gross income	US conventional
36% total DTI	All debt payments	Back-end
India FOIR	40–50%	Bank norms
Down 20%	Avoids PMI (US)	Better rate tier

Only comparing down payment and PMI scenarios?

This page estimates the maximum home price from income and debt ratios. For down-payment amount, loan size, and PMI comparisons, use the Down Payment Calculator →

Annual Income ($)

Monthly Debt Payments ($)

Down Payment ($)

Loan Term

Interest Rate (%)

Property Tax Rate (% / yr)

Home Insurance ($ / yr)

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Max Home Price

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Max Monthly Payment

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Down Payment %

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Debt-to-Income Ratio

Home Price	Monthly Payment	DTI %

What is House Affordability?

House affordability estimates the maximum home price that fits your income, debts, down payment, interest rate, property tax, and insurance assumptions. It starts from monthly cash-flow constraints, especially the 28/36 rule: housing costs around 28% of gross income and total debt around 36%.

Use this page before shopping or making offers, when the question is how much house fits the whole budget. The result is an affordable price range and debt-to-income picture, not just a down payment table.

If you already know the home price and only want to compare 3%, 5%, 10%, and 20% down payment scenarios with PMI, use the Down Payment Calculator. That page focuses on upfront cash and loan amount.

The 28/36 Rule

Max housing payment = Annual Income ÷ 12 × 0.28

Max total debt = Annual Income ÷ 12 × 0.36

Debt-adjusted max = Max total debt − Monthly debts

The 28/36 rule states that no more than 28% of gross monthly income should go toward housing costs, and no more than 36% toward total debt obligations. Lenders use this guideline to assess mortgage eligibility.

How to Use the House Affordability Calculator

1

Enter Your Income & Debts

Enter your gross annual income and all existing monthly debt payments (car loans, student loans, credit cards). These are used to apply the 28/36 rule.
2

Add Your Down Payment

Enter how much you have saved for a down payment. A larger down payment reduces your loan amount and monthly obligation.
3

Set Loan & Tax Details

Choose your desired loan term, expected interest rate, local property tax rate, and estimated annual home insurance cost.
4

Review Your Affordability

See your maximum home price, monthly payment, and DTI ratio. The comparison table shows affordability at multiple price points.

Example Calculation

Income $80,000/yr, monthly debts $400, down payment $40,000, 30-yr at 7%, property tax 1.2%, insurance $1,200/yr:

Max housing (28%) = $80,000 ÷ 12 × 0.28 = $1,867/mo

Debt-adjusted max = ($80,000 ÷ 12 × 0.36) − $400 = $2,000/mo

Limiting payment = $1,867/mo

Tax + insurance = ($X × 1.2% ÷ 12) + ($1,200 ÷ 12)

Max home price ≈ $265,000

How the House Affordability Calculator Works

Formula, assumptions, and calculation steps for this real estate tool.

Methodology

Real-estate calculators combine property price, income, rent, tax, mortgage, or expense inputs into affordability and return estimates.

Calculation Steps

Enter property, income, payment, or rent assumptions.
Convert annual values to monthly values where needed.
Apply affordability, yield, tax, or loan formulas.
Show the result with ratios or payment context.

Assumptions and Limits

Market rents, taxes, insurance, and rates can change by location.
Closing costs and local regulations are included only if provided.
Use a real-estate or lending professional for binding decisions.

Frequently Asked Questions

What is the 28/36 rule?

The 28/36 rule is a guideline used by lenders to assess mortgage affordability. It states that your monthly housing costs (mortgage principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income, and your total monthly debt payments should not exceed 36%. Most conventional lenders use this as a baseline for approval.

What DTI do lenders accept?

Most conventional lenders prefer a back-end debt-to-income ratio (total debts) of 36% or less. However, many lenders will approve loans up to 43–45% DTI, especially with compensating factors like a large down payment or strong credit score. FHA loans may allow up to 50% DTI in some cases.

How does down payment affect affordability?

A larger down payment reduces your loan amount, which lowers your monthly mortgage payment and allows you to afford a higher-priced home within the same income limits. Putting down 20% also eliminates the need for private mortgage insurance (PMI), which can save $100–$300/month. A bigger down payment may also qualify you for a lower interest rate.

What is debt-to-income ratio (DTI)?

DTI is the percentage of your gross monthly income that goes toward debt payments. The front-end DTI includes only housing costs, while back-end DTI includes all monthly debt obligations (housing + car loans + student loans + credit card minimums). Lenders use DTI to gauge how much additional debt you can responsibly handle.

Real-World Applications

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Pre-Search Budgeting

Establish a realistic home price range before starting your search — preventing wasted time viewing homes outside your budget and setting appropriate expectations.

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Down Payment Strategy

Model how saving an additional $20,000 for a down payment changes the maximum home price, monthly payment, and whether PMI can be avoided.

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Interest Rate Sensitivity

Calculate how a 1% rise in mortgage rates reduces the maximum affordable home price — critical during periods of rising rates.

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Dual Income Scenario

Model affordability based on one income vs two, to understand the risk if one partner stops working and the vulnerability of the mortgage to income changes.

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City vs Suburb Trade-off

Compare the maximum affordable home in an urban market vs a suburban market to quantify the financial trade-off of location choice.

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Debt Payoff Impact

Model how paying off a car loan or student debt before applying increases the maximum mortgage amount through improved debt-to-income ratio.

Common Mistakes

Treating lender approval as the affordability ceiling

Lenders approve based on income ratios, not your full cost of living. Your actual affordable amount may be significantly less than approval amount after accounting for childcare, savings goals, and lifestyle costs.

Forgetting to include taxes and insurance in the monthly payment

PITI (Principal, Interest, Taxes, Insurance) is what lenders actually count — not just PI. Annual property taxes (1–2% of value) and homeowners insurance ($1,000–$3,000/yr) add hundreds to the monthly cost.

Not accounting for PMI

Putting less than 20% down typically requires PMI (Private Mortgage Insurance) at 0.5–1.5% of the loan annually — adding $200–$600/month on a $400,000 loan until 20% equity is reached.

Underestimating ongoing maintenance costs

Budget 1–2% of the home's value annually for maintenance and repairs — a $400,000 home needs $4,000–$8,000/year. New homeowners often overlook this and find themselves cash-strapped within a year.

Using pre-tax income for affordability calculations

While lenders calculate ratios using gross income, your budget must work with after-tax take-home pay. A $150,000 gross income may only net $105,000 after taxes — plan with the after-tax number.

Maximum Affordable Home Price by Income (28% Rule, 7% Rate, 30yr, 10% Down)

Gross Annual Income	Max Monthly Payment	Max Home Price (est.)
$60,000	$1,400	~$185,000
$80,000	$1,867	~$245,000
$100,000	$2,333	~$305,000
$120,000	$2,800	~$365,000
$150,000	$3,500	~$455,000
$200,000	$4,667	~$605,000

References

Consumer Financial Protection Bureau. Know Before You Owe — Mortgage Shopping Guide. CFPB, 2024.
Fannie Mae. Selling Guide — Debt-to-Income Ratios. Fannie Mae, 2024.
National Association of Realtors. Home Affordability Index. NAR, 2024.
Urban Institute. Housing Affordability Monitor. Urban Institute, 2024.
Freddie Mac. Primary Mortgage Market Survey. FHFA, 2024.