Home Affordability Calculator: How Much Can I Afford?
Find out your maximum home price and loan amount based on your income and debts.
How Banks Determine Your Home Buying Power
Lenders use a variety of factors to determine how much they are willing to lend you. While your credit score is important for your interest rate, your Debt-to-Income (DTI) ratio is the primary driver of your maximum loan amount.
This affordability calculator uses these same industry-standard ratios to give you a realistic estimate of what you can qualify for in today's market.
The 28/36 Rule for Mortgage Affordability
A common rule of thumb used by lenders to assess home affordability is the 28/36 rule:
Front-End Ratio (28%)
Your total monthly housing payment (including taxes, insurance, and HOA fees) should not exceed 28% of your gross monthly income.
Back-End Ratio (36%)
Your total monthly debt payments (including the new mortgage, car loans, credit cards, and student loans) should not exceed 36% of your gross income.
Tips for Increasing Your Buying Power
Reduce Existing Debt
Paying down high-interest credit card debt or car loans lowers your DTI and increases your qualifying loan amount.
Improve Credit Score
A higher credit score qualifies you for lower interest rates, which directly reduces your monthly payment and boosts affordability.
Increase Down Payment
Putting more money down reduces the loan amount and can eliminate the need for Private Mortgage Insurance (PMI).
Gross Income vs. Net Income
Note that lenders calculate affordability based on your gross monthly income (before taxes are taken out). However, it's always wise to create a personal budget based on your net income (take-home pay) to ensure you are comfortable with the monthly payment in your day-to-day life.