Mortgage Affordability Calculator

How much house fits your assumptions?

This calculator estimates a purchase price from gross income, continuing debts, cash down payment and entered housing costs. It answers a numerical scenario question. It does not determine what a lender will approve or what your household can comfortably spend.

Gross income is income before taxes and deductions. The CFPB explains that debt-to-income ratios use gross monthly income, while lender and product limits vary. Your take-home income must also cover living costs and savings. Irregular or self-employed income entered here is an assumption, not verified qualifying income.

Two limits, one housing allowance

The housing limit caps the modeled payment: principal and interest, property taxes, property insurance, HOA dues and entered mortgage insurance. The total-debt limit caps that housing payment plus debt payments that continue after purchase.

We apply both percentages to exact gross monthly income and round each ceiling down to cents. Subtract continuing debt from the total-debt ceiling, then use the smaller housing allowance. That is the binding constraint. Taxes, insurance, HOA and mortgage insurance reduce the amount left for principal and interest. If no capacity remains, the calculator explains which step consumed it instead of displaying a zero-price estimate.

The editable 28% and 36% starting values are illustrative. The CFPB home loan toolkit, pages 3–5, discusses a housing rule of thumb and separates it from personal comfort. Fannie Mae’s DTI guidance describes different limits and exceptions for its underwriting paths. This tool implements none of those approval paths. Equal selected limits let the total-debt constraint control when continuing debt is positive.

From payment capacity to a home price

For a fixed annual note rate and monthly payments, we sum the value today of the supported future principal-and-interest payments. The production engine uses the equivalent inverse-annuity formula. Zero interest uses payment capacity multiplied by the number of payments. The CFPB distinguishes the note interest rate from APR; fees included in APR are not modeled here.

The supported loan rounds down to the largest whole cent whose annuity payment fits the capacity. The forward payment rounds up to cents, and one more cent of loan would exceed capacity. Adding the entered dollar down payment produces the estimated home price. More down payment adds dollar for dollar without changing the supported loan; a higher rate supports less borrowing under the same payment capacity. A longer term may support a larger loan but is not a recommendation or a claim of lower lifetime cost.

Each annual tax and insurance amount is separately divided by 12 and rounded up to cents. These conservative cent rules are this calculator’s model, not a lender’s escrow or servicing convention. An independent-method Python reference sums discounted payments with high-precision decimal and exact rational arithmetic. No ledger or lifetime-interest figure is inferred from this estimate.

Hypothetical example

With $120,000 annual gross income, $500 continuing monthly debt, $60,000 down, 6% interest for 30 years, $6,000 annual tax, $1,800 annual insurance and zero HOA/mortgage insurance, the 28% housing ceiling is $2,800. The 36% total-debt ceiling is $3,600; after existing debt it leaves $3,100 for housing. The housing limit binds.

Monthly tax and insurance total $650, leaving $2,150 for principal and interest. The supported loan is $358,601.97 and the exact modeled price is $418,601.97. Total monthly debt is $3,300. The $300 unused total-debt allowance is not disposable income. Mortgage insurance is excluded and may apply because the down payment is below 20%. These are hypothetical inputs, not defaults or typical market costs.

Costs to estimate before relying on a result

Ask the local assessor about taxes after purchase and obtain property-insurance quotes, including needed supplemental coverage. Fannie Mae’s housing-expense guidance notes that taxes may need to reflect reassessment. The seller’s old bill may not be your bill. These dollar costs remain fixed when the calculated price changes; update them for actual homes.

The annual-tax and insurance percentages shown in results describe your entered costs relative to the estimated price. They are not local rates or estimates produced by RightFigures. A zero entry excludes that cost and is disclosed beside the result.

Monthly mortgage insurance is entered rather than estimated. The CFPB explains that conventional loans with less than 20% down may require PMI. This calculator does not decide eligibility, quote a premium or model cancellation. Entering zero always means insurance is excluded, even at or above 20% down. Upfront or financed premiums and government-program insurance are outside this model.

The CFPB’s homebuying budget guidance separates other costs and cash needs from the loan payment. Reserve funds for closing, moving and emergencies before entering a down payment. This model excludes income taxes, living expenses, utilities, maintenance, savings goals, closing costs, cash reserves, fees, subordinate loans, special assessments, ground rent and specialized property or government-program underwriting. It also excludes variable rates, tax deductions, appreciation and future cost changes.

Questions about the estimate

Is this mortgage preapproval?

No. A lender must assess verified income, credit, assets, obligations, property and applicable loan rules. Mathematical capacity under your chosen ratios is not approval, prequalification, an offered loan or financial advice.

What monthly debts should I enter?

Enter payments that continue after purchase: car, student and personal loans, credit-card minimums, leases, support and retained housing obligations. Do not enter balances or count the new home’s modeled payment again. Exclude current housing payments that end when moving. Lenders can treat shorter installment debts differently; the Fannie Mae recurring-obligation guidance does not imply that this tool implements those underwriting exclusions.

Why do costs reduce the price even with a large down payment?

They consume the selected monthly housing allowance before principal and interest. Without positive loan-payment capacity, the tool explains the limit and does not turn a down payment into a supposed affordable cash purchase. When the supported loan is smaller than your down payment, results explicitly show that most of the price comes from cash.

Why can the estimate be higher than a comfortable budget?

Gross-income ratios do not measure take-home pay, your other living costs or savings priorities. High editable limits are stress-test assumptions, not spending recommendations. Compare the payment with your household budget and update costs before considering a purchase.

How should I use the other mortgage calculators?

Use the mortgage payment calculator to inspect costs for a specific price, the amortization calculator to examine repayment over a selected term, and the extra payment calculator for an existing loan with recurring extra principal. These tools have different purposes and rounding conventions. Inputs are not automatically transferred or added to URLs.

Educational estimate, not financial advice. Compare the payment with your take-home budget, living costs and savings goals. Actual lender qualification, taxes, insurance and servicing may differ.