Home Affordability Calculator
A deliberately conservative estimate of the house you can carry — built on the 28/36 rule lenders use, not on the maximum a lender would approve.
Your numbers
How the 28/36 rule works
Lenders evaluate two ratios against your gross monthly income. The front-end ratio caps total housing costs (principal, interest, taxes, insurance — "PITI") at 28%. The back-end ratio caps housing plus all other debt payments at 36%. Your affordable payment is whichever cap is lower — which is why existing car and student loans directly shrink the house you can buy: every $100 of monthly debt removes roughly $15,000–$20,000 of home price at current rates.
This calculator solves the problem properly: it finds the price where PITI exactly hits your binding cap, accounting for the fact that taxes and insurance scale with the price while the loan payment scales with price minus down payment.
Worked example
Household income of $110,000 ($9,167/month), $600/month in existing debts, $60,000 down, 6.5% for 30 years, 1.5% for taxes and insurance. The 28% cap allows $2,567 for housing; the 36% cap allows $3,300 − $600 = $2,700. The front-end cap binds. Solving, the affordable price lands around $390,000 with a payment near $2,570. Pay off a $300/month car loan first and nothing changes (the 28% cap still binds) — but if debts were $1,200/month, the back-end cap would take over and the affordable price would fall hard. Run your own scenarios to see which wall you're up against.
Why "approved" and "affordable" aren't the same
Lenders routinely approve back-end ratios up to 43–50% on some loan programs. They're pricing default risk across thousands of loans; you're living with one. A mortgage at the approval maximum leaves nothing for retirement savings, repairs (budget ~1% of home value per year), or the income dip that eventually happens to most households. Buying below the 28/36 line is what keeps a house from making you house-poor — and it's why this tool won't show you the aggressive number even though the formula could produce it. Check what the payment does to your monthly plan with the budget calculator — PITI should fit inside the needs bucket with room to spare.
Questions people ask
How much down payment do I really need?
20% avoids PMI, but waiting years to reach 20% in a rising market can cost more than PMI would have. Under 20% with PMI is a legitimate choice when the rest of the numbers are conservative. What you shouldn't do is empty the emergency fund to hit a down payment target — new houses generate surprise expenses immediately.
Does this include HOA fees?
No — add any HOA fee to the "monthly debt payments" field and the math handles it correctly (it reduces your housing budget dollar-for-dollar).
Rates dropped since I bought — now what?
That's a refinance question: the refinance calculator compares your current loan against a new offer including closing costs and break-even.