Free Home Affordability Calculator
Lenders size your mortgage from your income and debts, not from the listing price you fall in love with. Enter your numbers to get a realistic max home price, the monthly payment behind it, and how taxes and insurance change the answer.
This free home affordability calculator applies the standard 28/36 lending rules. For example, a household earning $120,000 with $500 in monthly debts, 10 percent down, and a 6.5 percent rate can afford roughly a $400,000 home with about a $2,800 monthly housing payment including taxes and insurance. Raising the down payment or lowering debts moves the max price more than small rate changes do.
Estimates only, not a loan offer or pre-approval. Lenders use additional factors including credit score, employment history, and reserves. Tax and insurance rates vary widely by location. Not financial advice.
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How home affordability math works
Lenders use two ratios. The housing ratio caps your total monthly housing cost, principal, interest, taxes, and insurance, at about 28 percent of gross monthly income. The debt ratio caps all monthly debts including housing at about 36 percent. Your max price is whichever ratio gives the smaller payment.
To turn a max payment into a max price, the calculator subtracts estimated taxes and insurance, converts the remaining payment into a loan amount at your rate and term, then adds your down payment. A bigger down payment raises the price twice: it adds directly and it shrinks the loan the payment must cover.
Taxes and insurance are the silent budget killers. In high-tax states they can add 30 percent or more to the loan payment, which is why the same income buys far less house in New Jersey than in Alabama. Always use local rates, not national averages.
Home affordability questions
How much house can I afford on $100,000 a year?
At $100,000 income, the 28 percent rule allows about $2,333 a month for housing. With 10 percent down and a 6.5 percent rate, that supports roughly a $330,000 home before local taxes and insurance. Heavy monthly debts lower it through the 36 percent back-end ratio; a bigger down payment raises it.
What is the 28/36 rule?
The front-end ratio divides total housing cost (loan payment plus taxes and insurance) by gross monthly income, targeting 28 percent or less. The back-end ratio adds all other minimum debt payments and targets 36 percent or less. Some loan programs allow higher ratios with compensating factors like strong credit or large reserves.
How much down payment do I need?
Conventional loans allow 3 to 5 percent down, FHA allows 3.5 percent, and VA and USDA allow zero down for eligible buyers. Below 20 percent down on a conventional loan, you pay private mortgage insurance, typically 0.5 to 1.5 percent of the loan per year, until you reach 20 percent equity.
Do property taxes affect how much house I can afford?
A $400,000 home with 2.5 percent property taxes costs about $833 a month in tax alone, versus $333 at 1 percent. That $500 monthly gap supports roughly $75,000 less in loan at typical rates. This is why affordability calculators ask for local tax rates.