Home Affordability Calculator
Calculate how much house you can comfortably afford based on your income and debts.
Maximum Recommended Home Price
$0
Based on standard 36% DTI limit.
What this calculator does
The Home Affordability Calculator helps prospective homebuyers determine their maximum realistic purchase price. Rather than relying on guesswork, it evaluates your gross annual income, existing monthly debt obligations, and available down payment to establish a sustainable housing budget. Designed for practical home shopping, this tool provides a clear, mathematically sound ceiling for your housing expenses, allowing you to browse listings and negotiate with confidence without becoming "house poor."
How the math works
The calculation relies on the widely accepted 36% Debt-to-Income (DTI) ratio, a standard threshold used by conventional mortgage lenders and recommended by the Consumer Financial Protection Bureau (CFPB). Under this rule, your total monthly debt payments—including your new mortgage principal, interest, property taxes, and insurance (PITI)—should not exceed 36% of your gross monthly income.
The calculator takes your annual income, divides it by twelve, and multiplies by 0.36 to find your maximum allowable total monthly debt. It then subtracts your existing monthly debts (like car loans or student debt) to isolate the maximum monthly payment available for housing. Finally, using the entered mortgage rate and down payment for the 2026 tax year environment, it reverse-engineers the maximum loan amount you can afford, adding your down payment to yield the final maximum home price.
Worked example
Imagine a household earning $90,000 annually with $500 in monthly student loan and auto debts, a $40,000 down payment, and an expected mortgage rate of 6.5%.
- Gross Monthly Income: $90,000 ÷ 12 = $7,500.
- Maximum Total Debt (36%): $7,500 × 0.36 = $2,700.
- Available Housing Payment: $2,700 - $500 = $2,200 available for the mortgage.
- Loan Amount: A $2,200 monthly payment at a 6.5% interest rate over 30 years roughly supports a loan of around $348,000 (excluding property taxes and insurance adjustments).
- Max Home Price: $348,000 loan + $40,000 down payment = $388,000 maximum home price.
Frequently Asked Questions
What is the 36% DTI rule?
The 36% rule suggests that all your monthly debt payments combined should not exceed 36% of your gross monthly income. This is a common benchmark used by mortgage lenders to ensure borrowers can comfortably afford their payments without financial strain.
Should I include utilities in my monthly debts?
No, standard DTI calculations only include fixed debt obligations like auto loans, student loans, minimum credit card payments, and child support. Variable living expenses like utilities, groceries, and cell phone bills are not included.
Does a larger down payment increase my affordability?
Yes. A larger down payment reduces the loan amount you need to borrow, which lowers your monthly mortgage payment. This allows you to purchase a more expensive home while keeping your monthly payment within the required DTI limit.
Disclaimer: This tool is for educational and scenario-analysis purposes only. It does not constitute financial, tax, legal, or investment advice. Always consult a licensed CPA or financial advisor regarding your specific situation. Figures and interest rates reflect the 2026 economic environment and are subject to change.
Built and verified by The Core-AI Engineering Desk — last reviewed August 31, 2026. Calibrated strictly to 2026 statutory figures.