How much house can I afford?

How this mortgage affordability calculator works

Every lender in America uses the same two rules to decide how much house you can buy: the front-end ratio and the back-end ratio. The front-end ratio says your total monthly housing payment — principal, interest, property tax, insurance, and HOA, bundled together as PITI — should not exceed 28% of your gross monthly income. The back-end ratio says all your monthly debts combined (PITI plus car loans, student loans, minimum credit card payments, and child support) should not exceed 36% of gross income, though many lenders will stretch to 43% or even 50% for a strong profile.

This calculator runs both rules against the numbers you type in and returns the lower of the two caps. That is the price point at which a normal, no-drama conventional lender will say yes without asking you to jump through hoops. It then reverse-solves for a home price: given a fixed down payment, interest rate, loan term, and property tax rate, what is the largest purchase price where your PITI stays inside those ratios?

What to type into each field

Annual household income (gross, not take-home)

Use the income number before taxes are withheld. If you are married or buying with a partner, combine both incomes only if you will both be on the mortgage application. If one of you has weak credit and the other does not, running two single applications and putting the house in the stronger name can get you a better rate — a quirk most first-time buyers never learn until they're in underwriting.

Monthly debt payments

Add up the minimum payments on every debt that shows up on your credit report: car loans, student loans, personal loans, and the minimum payment on every credit card — even the ones you pay off in full each month. Underwriters use the minimum payment, not the actual spend. Utilities, insurance, subscriptions, and rent do not count here; only things that appear on your credit report.

Down payment

This is cash you have already saved, not borrowed. A 20% down payment lets you skip private mortgage insurance (PMI), which can shave $100–$300 off your monthly payment at typical loan sizes. If 20% is not realistic, a 5–10% down payment with PMI is almost always better than waiting another three years for prices to keep running away from you. FHA loans go as low as 3.5%, VA loans as low as 0% if you qualify.

Interest rate and loan term

Use the real rate you've been quoted if you have one. If not, pull today's average 30-year fixed rate from Freddie Mac's weekly survey and add about 0.25% as a cushion — the headline rate assumes perfect credit and a 20% down payment. A 15-year mortgage will have a lower rate but roughly 40–50% higher monthly payment; most first-time buyers should stick with 30 years and make optional extra payments if they want to accelerate payoff.

Property tax, insurance, and HOA

Property tax varies wildly by state — New Jersey averages 2.2%, Hawaii just 0.3%. Pull your county's effective rate from the assessor's website. Homeowners insurance is typically $1,000–$2,500 per year depending on climate and building materials. HOAs are zero for most single-family homes outside planned developments, but $200–$600 a month for condos, townhouses, and gated communities. These three numbers are the reason a "payment you can afford" on a mortgage calculator turns into a payment you cannot afford after closing.

The affordability trap nobody warns you about

Lenders will approve you for more house than you should buy. Their 36% back-end ratio measures the debt on your credit report — not your actual life. It does not know you pay $800 a month for childcare, $400 for a gym habit, $300 for streaming and cloud storage, and $250 for your dog's insulin. A mortgage you can qualify for and a mortgage you can comfortably live with are two different numbers.

A safer rule: your total PITI should be no more than 25% of take-home pay— not gross income. If this calculator says you can afford $550,000 but that would push your PITI to 33% of your net paycheck, buy less house. The difference goes straight into investing, travel, or just breathing room the month your HVAC dies.

Hidden costs of homeownership most first-time buyers miss

• Closing costs: 2–5% of the home price in fees — appraisal, title insurance, loan origination, recording. On a $400,000 home, that is $8,000–$20,000 due at signing that does not count toward your down payment.
• Maintenance reserve:Plan on 1–2% of the home's value per year for upkeep. A $400,000 home needs $4,000–$8,000 a year set aside. Roofs, water heaters, HVAC, appliances, paint, landscaping — the clock on all of it resets the day you move in.
• PMI: If you put down less than 20%, expect 0.5–1.5% of the loan balance per year in PMI until you reach 20% equity.
• Property tax reassessment: In many states, the assessed value resets to your purchase price the year you close. If the previous owner bought in 2012 and paid $3,000 a year, you might pay $9,000 the first full year.
• Utility shock: A 2,400 sq ft house costs roughly 2.5× what a 1,100 sq ft apartment costs to heat, cool, and light.

How the math inside this calculator actually works

The monthly principal-and-interest payment on any fixed-rate loan is calculated from the standard amortization formula:

M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]

where M is the monthly payment, P is the loan amount (price minus down payment), r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments (years × 12). We then add property tax (annual × price ÷ 12), insurance (annual ÷ 12), and HOA to reach PITI. To solve for the maximum price, the calculator uses a binary search — narrowing in on the price where PITI exactly hits your DTI cap.

You can sanity-check any result by doing the same math in a spreadsheet with the =PMT()function. If the numbers don't match, one of you is wrong — usually a decimal-place error on the interest rate.

A realistic home-buying workflow

1. Run this calculator at your current income with 28% PITI and a healthy margin.
2. Check your net worth — you want liquid savings beyond the down payment, not a cleaned-out account on closing day.
3. Decide honestly whether to rent or buy. In many US cities today, renting plus investing the difference beats buying over a 10-year horizon. This is not universally true — run the numbers for your zip code.
4. Build the emergency fund that covers mortgage + expenses for 6 months before you close, not after.
5. Get pre-approved (hard pull, specific dollar cap, rate-lock optional) from two lenders. The quotes will differ by 0.1–0.4% — that is tens of thousands of dollars over 30 years.
6. Shop at 85–90% of your pre-approval, not 100%.
7. Keep 1–2% of purchase price liquid after closing for inevitable first-year surprises.

Frequently asked questions

Is this calculator accurate for 2026 mortgage rates?

Yes — the math is exact. Plug in whatever rate you've been quoted (or today's Freddie Mac average plus 0.25%) and you'll get the same answer a lender would.

Does it include PMI?

Not explicitly — add 0.5–1.5% of the loan amount per year to your insurance field if you're putting less than 20% down. Or raise your down payment until you clear the 20% threshold and see how much more house you can buy PMI-free.

What if I have variable or 1099 income?

Lenders average two years of tax returns for self-employed borrowers. Use your two-year average, not last year's peak. If you had one blowout year and one quiet year, use the average.

How much should I really put down?

Enough to clear 20% if you can — that kills PMI and gets you the best rate tier. But do not drain your emergency fund to get there. Cash reserves after closing matter more than shaving 0.25% off your rate.