acalculator

What is my mortgage affordability?

See how much house you can afford. The page finds the highest price whose full monthly payment fits the debt-to-income limits lenders use.

Your numbers

An example rate, not today’s rate. Use the rate your lender quotes.
Taxes, insurance, HOA, and PMI
Often 0.3% to 0.9% a year. Ask your lender.
Lender limits
Freddie Mac suggests less than 30%. FHA: 31%.
Fannie Mae: 36%, up to 45% or 50% with strong credit. FHA: 43%. VA: 41%.
Home price you can afford
$363,108.95

With $100,000.00 of yearly income and $500.00 of other monthly debts, you can afford a home of about $363,108.95, a $2,500.00 monthly payment.

Loan amount
$303,108.95
Monthly housing payment
$2,500.00
Principal and interest
$1,915.85
Property tax
$332.85
Home insurance
$125.00
HOA dues
$0.00
PMI
$126.30
Down payment
16.5%
Housing ratio (front-end)
30%
Total debt ratio (back-end)
36%
Limit
The housing limit (front-end ratio) sets the budget.

Home price you can afford: $363,108.95. With $100,000.00 of yearly income and $500.00 of other monthly debts, you can afford a home of about $363,108.95, a $2,500.00 monthly payment.

What makes up the monthly payment?

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Computes the highest home price whose monthly payment, with property tax, insurance, HOA dues, and PMI, fits the lender’s housing and total debt-to-income limits.

Example with the default inputs (Gross income $100,000.00, Other debt payments a month $500.00, Down payment $60,000.00, Interest rate 6.5%, Loan term (years) 30, Property tax (per year) 1.1%, Home insurance $1,500.00, HOA dues $0.00, PMI rate (per year) 0.5%, Housing limit (front-end ratio) 30%, Total debt limit (back-end ratio) 36%): With $100,000.00 of yearly income and $500.00 of other monthly debts, you can afford a home of about $363,108.95, a $2,500.00 monthly payment.

Method: budget = min(front × income ÷ 12, back × income ÷ 12 − debts); price = (budget − insurance − HOA + D × a) ÷ (a + tax ÷ 12), with a = r ÷ (1 − (1 + r)^−n), adding PMI when the loan is over 80% of the price.

  • Lenders compare the housing payment and all debt payments with gross monthly income; the limits are yours to set.
  • The rate is fixed; property tax is a percent of the price; insurance and HOA dues are fixed amounts.
  • PMI is charged as a yearly percent of the loan when the loan is over 80% of the price.
  • Closing costs and cash reserves are not included. Defaults are examples, not current rates.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Gross income $100,000.00, Other debt payments a month $500.00, Down payment $60,000.00, Interest rate 6.5%, Loan term (years) 30, Property tax (per year) 1.1%, Home insurance $1,500.00, HOA dues $0.00, PMI rate (per year) 0.5%, Housing limit (front-end ratio) 30%, Total debt limit (back-end ratio) 36% gives Home price you can afford $363,108.95, Loan amount $303,108.95, Monthly housing payment $2,500.00, PMI $126.30, Housing ratio (front-end) 30%, Total debt ratio (back-end) 36%.Source: Freddie Mac: a housing ratio under 30%; Fannie Mae Selling Guide B3-6-02: a 36% total ratio
  2. Gross income $150,000.00, Other debt payments a month $1,000.00, Down payment $100,000.00, Interest rate 6%, Loan term (years) 30, Property tax (per year) 1%, Home insurance $1,800.00, HOA dues $100.00, PMI rate (per year) 1.5%, Housing limit (front-end ratio) 30%, Total debt limit (back-end ratio) 36% gives Home price you can afford $500,000.00, Loan amount $400,000.00, PMI $0.00, Monthly housing payment $3,064.87.
  3. Gross income $60,000.00, Other debt payments a month $0.00, Down payment $0.00, Interest rate 0%, Loan term (years) 30, Property tax (per year) 0%, Home insurance $1,200.00, HOA dues $0.00, PMI rate (per year) 0%, Housing limit (front-end ratio) 30%, Total debt limit (back-end ratio) 36% gives Home price you can afford $504,000.00, Loan amount $504,000.00, Monthly housing payment $1,500.00, Note Most conventional loans need at least 3% down (at most 97% loan-to-value)..

How it works

Write I for the gross yearly income (a monthly amount is × 12), G = I ÷ 12 for the gross monthly income, E for the other monthly debt payments, f and b for the housing and total debt limits in percent, D for the down payment, r for the yearly rate ÷ 1200, n for the months (years × 12), T for the yearly property tax rate in percent, S for the yearly insurance (a monthly amount is × 12), H for the monthly HOA dues (a yearly amount is ÷ 12), and q for the yearly PMI rate in percent.

  1. Housing budget. M = the smaller of f ÷ 100 × G and b ÷ 100 × G − E. The page says which limit sets it: “The housing limit (front-end ratio) sets the budget.” when f ÷ 100 × G is at most b ÷ 100 × G − E (so also when they are equal), else “The total debt limit (back-end ratio) sets the budget.”
  2. Room for the loan and tax. R = M − S ÷ 12 − H. If R is 0 or less there is no answer.
  3. Payment factors. a = r ÷ (1 − (1 + r)^−n), the monthly payment per dollar borrowed (1 ÷ n at 0%); t = T ÷ 1200, the monthly tax per dollar of price; p = q ÷ 1200, the monthly PMI per dollar of loan.
  4. Price without PMI. At a price V the loan is V − D, and the payment without PMI is (V − D) × a + V × t + S ÷ 12 + H. Setting it equal to M gives V₁ = (R + D × a) ÷ (a + t).
  5. PMI. PMI is charged when the loan is more than 80% of the price, which is when V is more than 5 × D. If V₁ is at most 5 × D, the answer is V₁ with no PMI. Otherwise, with PMI the payment is (V − D) × (a + p) + V × t + S ÷ 12 + H, which gives V₂ = (R + D × (a + p)) ÷ (a + t + p), and the answer is the larger of 5 × D and V₂. (At exactly 5 × D the loan is 80% of the price, so there is no PMI.)
  6. At that price V: loan = V − D (it must be more than 0, or there is no answer); principal and interest = loan × a; property tax = V × t; PMI = loan × p when the loan is more than 80% of V, else 0; the monthly payment is the sum of these, insurance, and HOA dues. The housing ratio is payment ÷ G × 100 and the total ratio is (payment + E) ÷ G × 100. The down payment percent is D ÷ V × 100; under 3% the page notes: “Most conventional loans need at least 3% down (at most 97% loan-to-value).”

Assumptions

  • Lenders compare payments with gross (before-tax) monthly income. The limits are yours to set; the defaults (30% and 36%) are examples from Freddie Mac's guidance and Fannie Mae's manual underwriting limit.
  • The rate is fixed. Property tax is a percent of the price; insurance and HOA dues do not depend on the price.
  • PMI is a yearly percent of the loan, charged when the loan is over 80% of the price.
  • Closing costs, cash reserves, and credit score rules are not included. The default rate is an example, not a current market rate.

Worked examples by hand

$100,000 a year, $500 of other debts, $60,000 down, 6.5% over 30 years, 1.1% property tax, $1,500 a year of insurance, PMI 0.5%, limits 30% and 36%. G = 8,333.33, so the housing limit gives 0.30 × 8,333.33 = $2,500 and the total limit gives 0.36 × 8,333.33 − 500 = $2,500: M = $2,500. R = 2,500 − 125 = $2,375. a = 0.00632068, t = 0.00091667, p = 0.00041667. V₁ = (2,375 + 60,000 × 0.00632068) ÷ 0.00723735 = $380,559.46, more than 5 × 60,000 = $300,000, so PMI applies: V₂ = (2,375 + 60,000 × 0.00673735) ÷ 0.00765401 = $363,108.95. The loan is $303,108.95; principal and interest are $1,915.85, tax $332.85, insurance $125, and PMI $126.30, a total of $2,500: ratios of 30% and 36%.

$150,000 a year, $1,000 of other debts, $100,000 down, 6% over 30 years, 1% tax, $1,800 insurance, $100 HOA, PMI 1.5%, limits 30% and 36%. G = 12,500; the limits give $3,750 and $4,500 − $1,000 = $3,500, so M = $3,500 (the total debt limit). R = 3,500 − 150 − 100 = $3,250. With a = 0.00599551 and t = 0.00083333, V₁ = (3,250 + 599.55) ÷ 0.00682884 = $563,719.65, above 5 × 100,000 = $500,000. With PMI (p = 0.00125), V₂ = (3,250 + 724.55) ÷ 0.00807884 = $491,970.53, below $500,000. So the answer is $500,000: the loan is $400,000, exactly 80%, with $0 PMI, and the payment is 2,398.20 + 416.67 + 150 + 100 = $3,064.87.

$60,000 a year, no other debts, no down payment, 0% over 30 years, no tax, $1,200 a year of insurance, no PMI. M = 0.30 × 5,000 = $1,500 and R = 1,500 − 100 = $1,400. At 0%, a = 1 ÷ 360, so V = 1,400 × 360 = $504,000, the loan is $504,000, and the payment is $1,500. With no down payment the page notes that most conventional loans need at least 3% down.

Other questions people ask

How much house can I afford?

Lenders look at two ratios of your gross monthly income: the housing payment (front-end) and all your debt payments (back-end). With $100,000 a year, $500 of other debts, and limits of 30% and 36%, the most you can spend on housing is $2,500 a month. With $60,000 down at 6.5% over 30 years, that buys a home of about $363,109.

What debt-to-income ratio do lenders allow?

It depends on the loan. Fannie Mae allows a total ratio of 36% for manually underwritten loans, up to 45% with strong credit and reserves, and 50% through its automated system. FHA uses 31% for housing and 43% in total without compensating factors. VA uses 41% in total, with a residual income test. Freddie Mac suggests a housing ratio under 30%.

What counts as debt in the back-end ratio?

Monthly payments on car loans, student loans, personal loans, minimum credit card payments, child support, and alimony, plus the new housing payment. Everyday costs such as food and utilities do not count, but you still need room for them in your budget.

Why does PMI lower what I can afford?

With less than 20% down, a conventional loan usually adds private mortgage insurance, which takes part of the monthly budget. Sometimes the highest price is exactly five times your down payment: a little more would add PMI and push the payment over the limit.

Does this include closing costs?

No. The down payment here is what goes toward the price. Keep separate cash for closing costs (often 2% to 5% of the price, says Freddie Mac) and an emergency fund.

Is the most I can afford what I should spend?

Not always. The limits show what lenders may approve, not what fits your life. A lower price leaves room for savings, repairs, and changes in income. Try a lower housing limit to see a safer price.