Use this house affordability calculator to estimate the highest home price you can afford and the monthly housing payment it would create, including taxes, insurance, HOA, and mortgage insurance. It also shows what rule limits you most (DTI, housing ratio, budget, or cash to close) so you know what to change.
Advanced options
How to use this calculator
- Enter your Annual household income (before taxes). This tool uses gross income because common lender ratios are based on gross pay.
- Enter Monthly debt payments (not including rent), like car loans, student loans, and minimum credit card payments.
- Enter your Down payment (cash you will put down).
- Enter the Mortgage interest rate and choose the Loan term (like 30 years).
- Set your DTI limit (back-end ratio). DTI means total monthly debt divided by gross monthly income.
- Open Advanced options and enter monthly Property taxes, Homeowners insurance, and HOA dues so the monthly payment estimate is realistic.
- Choose a Mortgage insurance type (Auto, None, Conventional PMI, or FHA MIP). If you pick PMI or FHA MIP, confirm the rates shown.
- (Optional) Enter a Max monthly housing budget to cap the payment based on your own comfort, even if ratios allow more.
- (Optional) Enter Closing costs and a Cash reserve to check if you would still have enough cash after closing.
- Click Calculate. Read the binding constraint and the sensitivity check to see whether rate, down payment, or monthly costs matter most.
Methodology
What this calculator is solving: It estimates the maximum home price that keeps your monthly housing payment under the limits you set, then shows the matching payment breakdown and ratios.
Key definitions
Gross monthly income: your annual income divided by 12.
DTI (debt-to-income): total monthly debt divided by gross monthly income.
Back-end DTI: includes housing plus your other monthly debts.
Front-end ratio: housing cost divided by gross monthly income.
PITI: principal, interest, property taxes, and homeowners insurance (many budgets also include HOA and mortgage insurance in the same monthly total).
28/36 guideline: the commonly used affordability rule based on front-end and back-end ratios. [1]
Calculation Steps
Step 1: Convert income to gross monthly income. gross_monthly_income = annual_gross_income / 12.
Step 2: Turn your ratio limits into a maximum allowed housing payment. max_housing_by_front_end = (housing_front_end_limit/100) * gross_monthly_income. max_housing_by_back_end = (dti_back_end_limit/100) * gross_monthly_income - monthly_debts. If you entered a personal budget, max_housing_by_budget = max_monthly_housing_budget; otherwise it is treated as Infinity (no budget cap). The calculator uses max_housing_allowed = the smallest of those values. If max_housing_by_back_end is 0 or less, there is no room left under your DTI limit for a mortgage payment, so affordability is effectively $0.
Step 3: For a given home price guess, compute the monthly housing payment. First compute the base loan amount: loan_amount_base = max(home_price - down_payment_amount, 0). Then compute mortgage insurance (if used): for conventional PMI, monthly_mortgage_insurance = (pmi_rate_annual/100) * loan_amount_base / 12; for FHA MIP, monthly_mortgage_insurance = (fha_annual_mip_rate/100) * loan_amount_base / 12. If FHA upfront MIP (UFMIP) is financed, add ufmip_amount = (fha_ufmip_rate/100) * loan_amount_base to the starting loan balance; otherwise keep the loan balance as the base loan amount and treat UFMIP as extra cash needed at closing. The tool then calculates the monthly principal and interest for a fixed-rate mortgage using the standard amortization payment formula (often called PMT). If interest_rate is 0%, it uses payment_PI = loan_amount_total / number_of_months to avoid divide-by-zero.
Step 4: Add monthly non-loan costs to get the full housing payment. housing_payment = payment_PI + monthly_property_tax + monthly_homeowners_insurance + monthly_hoa + monthly_mortgage_insurance. This is the number compared to the front-end limit and your optional budget cap.
Step 5: Compute ratios for the final answer. front_end_ratio_result = housing_payment / gross_monthly_income. back_end_dti_result = (housing_payment + monthly_debts) / gross_monthly_income. These are shown as percentages so you can compare them to your limits. [1]
Step 6: Find the maximum home price with a safe numeric search. Because mortgage insurance and financed FHA UFMIP can change the payment in ways that are hard to solve with one clean algebra equation, the calculator uses a bisection search: it starts with a low price and a high price cap, then repeatedly tests the midpoint. If the midpoint fits the payment limits (and fits the cash-to-close rule when you use a reserve), it moves the low bound up; otherwise it moves the high bound down. After enough iterations, the low bound is the maximum affordable home price estimate.
Cash-to-close check (optional): cash_to_close_estimate = down_payment_amount + closing_costs_amount (and if FHA UFMIP is not financed, add UFMIP here). If you entered a cash reserve, the tool enforces cash_left_after_close = available_cash - cash_to_close_estimate to be at least 0. If you did not enter a reserve, the cash constraint is skipped.
Binding constraint: After solving, the tool identifies which rule was tightest at the maximum price: housing ratio limit (front-end), DTI limit (back-end), your personal budget cap, or cash needed at closing. This helps you see what change would increase affordability the most (for example: lower rate, pay down debts, increase down payment, or lower taxes/HOA).
Sensitivity check: The calculator repeats the solve a few times with small changes (interest rate up/down by 0.5%, and down payment up/down by 10%) and summarizes how the max home price changes. This is meant to show which input matters most for your situation.