Mortgage Affordability Calculator
Estimate how much home you may be able to afford based on your income, monthly debts, down payment, interest rate, loan term, and estimated housing costs.
How much home can I afford?
Select your currency and enter your financial information. The calculator uses your target debt-to-income ratio to estimate an affordable monthly housing payment and home price.
Estimated affordable home price
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| Gross monthly income | — |
| Monthly debt payments | — |
| Target DTI | — |
| Interest rate | — |
| Loan term | — |
| Monthly property tax | — |
| Monthly homeowners insurance | — |
Step-by-step calculation
What is mortgage affordability?
Mortgage affordability is an estimate of how much housing a household may be able to support based on income, existing debt, mortgage terms, and housing expenses.
Affordability is different from loan approval. A lender may also consider credit history, employment, assets, reserves, loan type, property characteristics, and other underwriting factors.
What is debt-to-income ratio?
Debt-to-income ratio, or DTI, compares monthly debt obligations with gross monthly income.
How does the mortgage affordability calculator work?
The calculator first estimates the maximum total monthly debt based on the income and target DTI entered. Existing monthly debt is then subtracted.
Estimated monthly property tax and homeowners insurance are deducted from the remaining housing budget. The remaining amount is treated as the available principal-and-interest mortgage payment.
The calculator then converts that payment into an estimated mortgage amount using the selected interest rate and loan term, and adds the down payment to estimate an affordable home price.
Mortgage affordability example
Suppose a household earns 8,000 units of the selected currency per month and has 1,000 units of existing monthly debt. Using a 36% target DTI:
2,880 − 1,000 = 1,880
If property tax and insurance total 300 per month:
1,880 − 300 = 1,580
Available principal-and-interest budget:
1,580 per month
The calculator then uses the selected interest rate and loan term to estimate the mortgage amount supported by that payment.
Factors that can affect affordability
Actual affordability may differ because of credit score, interest rate, loan program, mortgage insurance, closing costs, property taxes, insurance, association fees, income stability, reserves, and lender-specific requirements.
A financially comfortable home price may also be lower than the maximum amount a lender may approve.
Related calculators
How much house can I afford?
A mortgage affordability estimate starts with the amount you can reasonably devote to housing each month. This calculator uses your gross monthly income, existing monthly debt, a target debt-to-income ratio, down payment, interest rate, loan term, property tax, and homeowners insurance to produce a planning estimate.
The result is not a promise that a lender will approve that amount. A comfortable budget can also be lower than a maximum borrowing amount because homeownership may include maintenance, utilities, mortgage insurance, association fees, closing costs, and other expenses.
Mortgage affordability vs. mortgage qualification
Affordability and qualification are related but different questions. A lender evaluates its own underwriting requirements, while a personal affordability decision should also consider your broader household budget and financial priorities. Consumer guidance recommends focusing on a payment that fits your circumstances rather than simply borrowing the maximum amount available.
What is DTI?
Debt-to-income ratio (DTI) compares monthly debt obligations with gross monthly income. Different lenders and loan products can use different limits, so the target DTI in this calculator is a planning assumption rather than a universal approval rule.
For this affordability estimate, the selected DTI determines the maximum combined monthly debt budget. Existing debt is then deducted to determine the amount available for housing.
How the calculation works
- Calculate the target total monthly debt limit from income × target DTI.
- Subtract existing monthly debt payments.
- Subtract monthly property tax and homeowners insurance.
- Use the remaining principal-and-interest payment to estimate the loan amount.
- Add the down payment to estimate the affordable home price.
Available housing budget = Maximum total debt − Existing debt
Principal & interest budget = Available housing budget − Taxes − Insurance
Affordable home price = Estimated loan amount + Down payment
Why interest rate matters
For a fixed loan amount and term, a higher interest rate generally produces a higher principal-and-interest payment. When affordability is calculated from a fixed monthly payment, a higher rate therefore generally supports a smaller loan amount. Testing several reasonable rate scenarios can show how sensitive your estimated home price is to financing costs.
How the down payment affects affordability
A larger down payment can increase the estimated home price supported by a given mortgage budget because less money needs to be borrowed. It can also affect other costs. For example, some loans may require mortgage insurance when the down payment is relatively small.
Do not use every available dollar for a down payment without considering closing costs, emergency savings, moving expenses, repairs, and other cash needs.
Costs this calculator does not fully model
This estimate includes the property tax and homeowners insurance amounts you enter, but real homeownership costs can be broader. Depending on the property and loan, you may also have mortgage insurance, HOA or condominium fees, flood insurance, utilities, maintenance, repairs, closing costs, and other expenses.
The calculator also does not evaluate credit score, employment history, assets, reserves, loan-program eligibility, property condition, or lender-specific underwriting rules.
Example: estimating an affordable home price
Suppose gross monthly income is 8,000, existing monthly debt is 1,000, and the target DTI is 36%. The total monthly debt limit is 2,880. After existing debt, 1,880 remains for housing. If property tax and insurance total 300 per month, the principal-and-interest budget is 1,580 per month.
The calculator then converts that 1,580 monthly principal-and-interest budget into an estimated loan amount using the selected interest rate and term, and adds the down payment to estimate the home price.
How to use the result responsibly
- Try more than one interest-rate scenario.
- Compare different down-payment amounts.
- Include realistic property tax and insurance estimates.
- Check the result against your actual household budget.
- Keep room for savings, maintenance, utilities, and unexpected costs.
- Compare the estimate with the terms offered by an actual lender.
Frequently asked questions
What income should I enter?
Enter gross monthly income before taxes and other deductions, consistent with the calculator’s DTI formula.
What should I include in monthly debt?
Use recurring monthly debt payments that should be considered in your affordability estimate. Follow the definitions used by your lender when comparing this estimate with an actual application.
What target DTI should I use?
There is no single DTI that applies to every borrower or loan. Use a planning assumption appropriate to your situation and test more than one scenario.
Does the calculator include property taxes?
Yes. Enter an annual property-tax estimate and the calculator converts it to a monthly amount.
Does it include homeowners insurance?
Yes. Enter annual homeowners insurance and it is converted to a monthly amount before estimating the principal-and-interest budget.
Does a larger down payment increase the affordable home price?
Generally, yes. A larger down payment means less borrowing is required for the same home price, although your available cash and other purchase costs should also be considered.
Why is my affordable home price lower than I expected?
Existing debt, a higher interest rate, a shorter term, higher property costs, or a more conservative DTI can reduce the estimated loan amount.
Is this the amount a bank will approve?
No. It is a planning estimate. Lenders may consider credit, income verification, assets, reserves, loan type, property details, and their own underwriting criteria.
Does this calculator include closing costs?
No. Closing costs and other transaction expenses are not included in the calculated home price unless you account for them separately in your budget.
Can I use this calculator outside the United States?
Yes, the calculator supports multiple currencies, but mortgage rules, taxes, insurance, lending practices, and affordability standards vary by country and lender.
Should I borrow the maximum amount shown?
Not necessarily. A maximum estimate is not the same as a comfortable household budget. Consider your other expenses, savings goals, emergency reserves, and future costs.
How accurate is the result?
The result is only as useful as the assumptions entered. Actual rates, taxes, insurance, lender rules, fees, and household expenses can change the amount you can comfortably afford.
Important: This calculator is provided for general informational and educational purposes only and does not constitute financial, mortgage, tax, legal, or investment advice. Results are estimates based on the information entered and the assumptions selected. Actual lender qualification, mortgage rates, loan terms, taxes, insurance, fees, and affordable home prices may differ. Always verify important financial information with a qualified professional or your lender before making financial decisions.