How Much Mortgage Can I Afford?
Enter your income, monthly debts, down payment and rate. The calculator finds the largest mortgage that keeps you inside typical lender debt-to-income limits, then shows the home price and full monthly cost that go with it.
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EstimateThis calculator provides estimates for educational and informational purposes only. It does not constitute financial, investment, legal, accounting, or tax advice. Results are based on the assumptions and information entered and may differ materially from actual outcomes. Tax rules and financial regulations can change. Consult an appropriately qualified professional for advice specific to your situation.
This calculator provides estimates for planning and is not a loan offer or pre-approval.
- Solves for the largest loan that satisfies both lender limits: the housing ratio (front end) and the total debt ratio (back end).
- Includes property tax, home insurance, HOA dues and mortgage insurance when your down payment is under 20%, not just principal and interest.
- Shows how the answer changes with income and with interest rate, so you can see what a rate move costs in buying power.
- Lets you pick the debt-to-income limits that match the loan type: conventional, FHA or a more cautious personal budget.
How to use this calculator
Enter your gross annual income (before tax), the total of your monthly debt payments such as car loans, student loans and card minimums, and the cash you have for a down payment. Then enter the interest rate and term you expect. Open Advanced to change the debt-to-income limits, property tax rate, insurance, HOA dues and the mortgage insurance rate.
This differs from the Home Affordability Calculator, which starts from a target budget. This one starts from the limits a lender applies and works out the largest mortgage they allow.
How the maximum mortgage is found
Lenders test two ratios, both measured against gross monthly income:
- Front-end ratio. Total housing cost divided by income, commonly capped near 28%.
- Back-end ratio. Housing cost plus all other monthly debt, divided by income, commonly capped near 36% for conventional loans and higher for some programs.
Housing budget = lesser of (income x front-end limit) or (income x back-end limit - other debts) Monthly cost = principal + interest + property tax + insurance + HOA + mortgage insurance Max mortgage = the largest loan whose monthly cost fits inside the housing budget
Property tax and mortgage insurance depend on the size of the loan, so the answer is found by search rather than a single formula. The calculator tries loan sizes until the monthly cost just fits the budget.
A worked example
Take a household earning $95,000 a year, with $450 a month in other debts, $40,000 for a down payment, and a 6.5% 30-year rate. Using 28% and 36% limits, the largest mortgage is about $262,000, which supports a home price near $302,000. The full monthly cost is about $2,214, of which principal and interest is $1,656.
Income matters directly. At $60,000 the same rules support a mortgage near $160,000, and at $120,000 about $337,500. Rates matter too: at 8% instead of 6.5%, the first example falls to about $231,500.
What the limits really are
The 28/36 pair is a long-standing rule of thumb and a good conservative guide. Actual limits vary by program. Many conventional loans approve borrowers with back-end ratios up to 45% or even 50% when credit and savings are strong, and FHA loans can go higher still. A lender being willing to approve a ratio does not mean the payment will feel comfortable, so use the limits fields to test a more cautious figure alongside the maximum.
What the ratios leave out
Debt-to-income ratios do not count groceries, childcare, commuting, saving for retirement or home maintenance. A common rule is to budget 1% to 2% of the home's value each year for repairs. Closing costs, moving costs and an emergency fund also come out of cash before you have a down payment to spend. If the maximum figure leaves you with no breathing room, choose a smaller loan.
Assumptions and limitations
- Gross income is stable and fully countable. Variable pay, bonuses and self-employment income are treated differently by lenders.
- Debts are the monthly minimums. Include every loan and card payment that appears on your credit report.
- Property tax and insurance are estimates. Use local figures where you can; they vary widely by area.
- Mortgage insurance is added when the down payment is under 20% and is shown separately.
- Not a pre-approval. Credit score, assets, employment history and the specific program all affect what a lender will actually offer.
Common mistakes
Using take-home pay. Lender ratios use gross income, but your budget is built on take-home pay.
Forgetting tax, insurance and HOA. They can add several hundred dollars to the monthly cost.
Treating the maximum as the target. The most a lender allows and the most you should borrow are different questions.
Ignoring rate changes. A rate that moves by a point can change buying power by tens of thousands of dollars.
Frequently asked questions
A common guide is a total housing payment of about 28% of gross monthly income and total debts of about 36%. On a $95,000 income with $450 of other monthly debt, those limits support a mortgage near $262,000 at a 6.5% rate, depending on taxes, insurance and the down payment.
Under 36% is a conservative target. Many lenders approve up to 43% to 50% depending on the loan program and the strength of your credit and savings.
It increases the home price you can afford, because the down payment adds to the loan. It can also remove mortgage insurance at 20%, which lowers the monthly cost and so allows a larger loan.
A higher rate raises the payment on each dollar borrowed, so the same budget supports a smaller loan. In the default example, moving from 6.5% to 8% cuts the maximum mortgage by about $30,000.
Yes. The monthly cost includes property tax, home insurance, any HOA dues and mortgage insurance, so the loan size fits the whole payment rather than only principal and interest.
No. A pre-approval comes from a lender who verifies your income, credit and assets. This calculator gives an estimate you can use to plan before you apply.