This house affordability calculator estimates a home price budget from monthly income, existing monthly debts, a target debt-to-income (DTI) ratio, loan rate, term, and down payment. It answers a planning question: roughly how much house fits these cash-flow assumptions before a lender runs full underwriting.
How to use the house affordability calculator
- Enter monthly income (gross income if you are matching common DTI rules of thumb).
- Enter other monthly debt payments (cars, student loans, cards, and similar).
- Set the DTI percent you want to stress-test (often near 36% as a simple starting point).
- Enter expected mortgage rate and term in years.
- Enter down payment cash you will bring to closing.
- Read max monthly payment, max loan, and affordable price.
Formula used on this page
Max monthly mortgage payment = income × (DTI / 100) − other debts.
That payment is then inverted through the standard amortizing loan formula to find the maximum loan principal at your rate and term. Affordable price = max loan + down payment.
If other debts already consume the full DTI allowance, the calculator reports that there is no room for a mortgage under those inputs.
Worked example
Monthly income $7,000, other debts $800, DTI 36%. Max housing payment = 7,000 × 0.36 − 800 = 1,720. At 6.5% for 30 years, that payment supports a loan near the principal that amortizes to $1,720 per month. Add a $40,000 down payment to estimate an affordable purchase price. Re-run with a higher rate or lower DTI to see how quickly the budget shrinks.
What this estimate leaves out
Property taxes, homeowners insurance, HOA dues, and mortgage insurance are not bundled into the payment model. Lenders may use different DTI definitions, credit overlays, and residual income tests. Treat the result as a planning ceiling, not an approval.
Related calculators
Turn a target price into cash needed with the down payment calculator. Size principal and interest alone with the mortgage calculator. Compare ownership versus renting with the rent vs buy calculator. Stress-test debt load with the debt to income calculator.
Frequently asked questions
Should I use gross or net income?
Many DTI rules of thumb use gross monthly income. If you prefer a conservative budget, use take-home pay and a lower DTI percent.
Is 36% DTI always safe?
No. It is a common illustration, not a guarantee. Some programs allow higher ratios; your comfort level and local housing costs may call for a lower target.
Does a larger down payment always raise the price I can afford?
Yes in this model, because price equals loan plus down payment. In real markets, a larger down payment can also improve rate or remove mortgage insurance, which this simple tool does not reprice automatically.