Mortgage Affordability Calculator

Worked example

Example: $120,000 annual income, 28% housing ratio, $400/month debts, 10% down, 6.5% rate, and 30-year term estimates a lower max home price once optional PMI is included—switch to 20% down or raise PMI rate to see the impact.

When to use this

• Estimating a realistic home price range before house hunting.
• Testing how down payment and interest rate change your budget.
• Seeing whether debts (car loans, student loans) reduce affordability.
• Comparing payment targets for 15-year vs 30-year scenarios.

Common examples

• $90,000 income, $600/mo debts, 7% down payment, and a $2,200 target payment → estimate a home price range before touring listings.
• $140,000 household income with $1,200/mo debts → compare a 30-year vs 15-year payment budget using the same down payment.
• First-time buyer with $45,000 saved → see how down payment size changes a comfortable price range at the same interest rate.

Common mistakes

• Using gross income but forgetting recurring monthly debts.
• Assuming taxes and insurance are included in a principal-only payment target.
• Treating affordability as lender approval rather than comfort level.
• Ignoring HOA fees or PMI when down payment is under 20%.

How it works

Estimates an affordable home price from gross income, a housing-ratio guideline, monthly debts, down payment ($ or %), interest rate, term, and optional tax, insurance, HOA, and PMI costs. When down payment is under 20%, optional PMI (annual % of loan) reduces the P&I budget. Property tax can be entered as a fixed annual amount or as a percent of home value. Results are planning estimates, not lender approvals.

Limitations

Affordability rules vary by lender and program. Property tax, insurance, and HOA are estimates you provide.

Privacy and file handling

Your data stays on your device and is not uploaded.

Formula or method

Affordable housing payment is limited by income × housing ratio minus existing monthly debts. Home price backs out down payment from the loan amount the remaining P&I budget can support after tax, insurance, HOA, and optional PMI.

Important notice

Results are estimates for educational purposes and are not financial advice. Lender guidelines, taxes, insurance, PMI, and local costs vary. Consult a qualified financial professional for personal guidance.