Home Affordability Calculator
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Max Home Price$303,586.23
Max Loan Amount$243,586.23
Max Monthly Payment$1,588.00
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This calculator uses the 28/36 rule: your housing payment should not exceed 28% of gross monthly income, and total debt payments should not exceed 36%. The binding constraint determines your maximum monthly payment, which is then converted to a loan amount using the present value of annuity formula.
Jane Smith, CFPCFP®
Reviewed 2025-01-15 · View methodology
Frequently Asked Questions
How much house can I afford?
A common guideline is to keep your monthly housing payment below 28% of gross monthly income, and total debt payments below 36%. Lenders typically use these same ratios when qualifying borrowers.
What debts should I include in the calculation?
Include all recurring monthly debt obligations: car loans, student loans, credit card minimum payments, personal loans. Do not include utilities, groceries, or subscriptions — those are expenses, not debts.
Does my credit score affect how much I can borrow?
Yes. A higher credit score (740+) qualifies you for lower interest rates, which increases the purchase price you can afford at the same monthly payment.
What is PMI and when do I need it?
Private Mortgage Insurance (PMI) is required on conventional loans when the down payment is less than 20%. PMI typically costs 0.5–1% of the loan amount annually and can be removed once equity reaches 20%.
Should I buy as much house as I'm approved for?
Not necessarily. Lender approval reflects maximum borrowing capacity, not optimal financial health. Many planners recommend staying below your approval limit to maintain cash flow and avoid being 'house poor.'
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