Home Affordability Calculator

A rule of thumb, not a lender approval. Enter income, debts, down payment, rate, and term. The price uses the lower of the 28% and 36% housing caps.

Gross Annual Income ($)

Monthly Debt Payments ($)

Down Payment ($)

Annual Rate (%)

Term (Years)

Property Tax (Annual $)

Insurance (Annual $)

Smart Tips

• This is a rule of thumb, not a lender approval.

• Gross monthly income is gross annual income divided by 12.

• Max PITI is the lower of 28% of gross monthly income and 36% of gross monthly income minus other monthly debts.

• Monthly tax and insurance are the annual amounts divided by 12. They are subtracted before the loan is solved.

• If that remainder is not positive, no home price is shown.

The Formula

Max PITI = the lower of 28% × income ÷ 12 and 36% × income ÷ 12 − debts
P = payment × [(1+r)^n − 1] / [r(1+r)^n]
Price = P + down payment

P = Loan principal
What the principal-and-interest remainder can support

r = Monthly rate
Annual rate ÷ 12. At 0%, P = payment × n

n = Months
Term in years × 12

payment = Principal and interest
Max PITI minus monthly tax and insurance

This is a rule of thumb, not a lender approval. Housing means principal, interest, tax, and insurance. If the principal-and-interest remainder is not positive, debts or tax and insurance already use the budget, and no home price is shown.

Key Insights

Two Caps

The 28% cap looks at housing alone. The 36% cap looks at housing plus the other debts you enter. The lower one is the max PITI.

Tax And Insurance

Annual property tax and insurance are divided by 12 and taken out of the max PITI before the loan is solved.

Down Payment

The home price is the loan principal plus the down payment. The down payment does not change the loan the payment can support.

Budget Used

When debts, tax, or insurance already take the whole housing budget, the page does not show a price.

Frequently Asked Questions

No. The 28% and 36% limits are a rule of thumb, not a lender approval. The result is an estimate from the numbers you enter.

Gross monthly income is gross annual income divided by 12. Housing, meaning principal, interest, tax, and insurance, is capped at 28% of gross monthly income. Housing plus other monthly debt payments is capped at 36% of gross monthly income. Max PITI is the lower of those two: 28% of gross monthly income, and 36% of gross monthly income minus the monthly debt payments.

Monthly property tax is the annual property tax divided by 12. Monthly insurance is the annual insurance divided by 12. Both are subtracted from max PITI. The remainder is the principal-and-interest payment. The loan principal is P = payment × ((1+r)^n − 1) / (r(1+r)^n), where r is the annual rate divided by 12 and n is the term in years times 12. If the annual rate is 0%, the loan is that payment times n. The home price is the loan plus the down payment. Leave debts, the down payment, tax, or insurance blank and each one counts as zero.

If the principal-and-interest remainder is not positive, debts or tax and insurance already use the budget. No home price is shown.

The formulas in the formula section on this page are the ones this calculator runs. No outside rate table is used unless the page says otherwise. Source: CFPB how much can I afford: https://www.consumerfinance.gov/ask-cfpb/how-much-can-i-afford-to-borrow-for-a-mortgage-en-119/.

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Home Price

Enter values to calculate

Loan Amount

Max PITI

Note:This is a rule of thumb, not a lender approval. Housing is capped at 28% of gross monthly income, and housing plus other debts at 36%. The lower cap is the max PITI.