Home Affordability Calculator — How Much House Can I Afford? 2026
The bank says you qualify for $550,000. Your gut says something feels off. Both can be true. Lenders calculate the maximum they will approve — not the maximum you should spend. This calculator shows you a realistic affordable home price based on your income, debts, and ownership costs, not just what a lender will technically extend.
Home Affordability Calculator
Lender max vs. your comfortable max · PMI · Credit score impact · Real ownership costs
How to Use This Home Affordability Calculator
Annual Household Income
Gross vs Net — Which Number to Enter
Enter your total annual household income before taxes and deductions. This is the number lenders use — gross income, not take-home pay. For a two-income household, add both salaries. Include consistent bonus income only if it has been received for at least two consecutive years and is likely to continue.
Do not include: irregular overtime, one-time payments, rental income you can’t document, or business income not reflected in your tax returns. Lenders will verify income sources during underwriting. Inflating this number produces an affordability estimate that won’t match your actual approval.
Monthly Debt Payments
Enter the total of all minimum monthly debt payments: car loans, student loan minimums, credit card minimums, personal loans, child support, and alimony. Do not include groceries, subscriptions, utilities, or other everyday expenses — these are not counted in the lender’s DTI calculation, though they absolutely affect your real-world budget.
This number has a dramatic effect on your affordable home price. Every $100 of monthly debt reduces your home buying power by approximately $12,000–$15,000 at current rates.
How Debt Kills Buying Power — Real Numbers
At $120,000 household income and 6.7% rate, 30-year loan:
| Monthly Debt | Affordable Home Price (28/36) | Buying Power Lost |
|---|---|---|
| $0 | $520,000 | — |
| $300 | $480,000 | −$40,000 |
| $600 | $436,000 | −$84,000 |
| $850 | $404,000 | −$116,000 |
| $1,200 | $356,000 | −$164,000 |
Paying off a $300/month car loan before applying for a mortgage could add $40,000+ to your home buying power — often worth more than saving the same amount for a larger down payment.
Down Payment
Enter the amount you have available for a down payment. The calculator uses this to determine your loan amount and whether PMI applies. Every dollar of down payment directly reduces your loan amount and your monthly payment.
The 20% Down Payment Threshold
Putting 20% down eliminates PMI — typically $100–$250/month on a $400,000 loan. It also reduces your loan amount and often qualifies you for a slightly better interest rate. However, 20% is not required:
- Conventional loans: 3–5% minimum
- FHA loans: 3.5% minimum (580+ credit score)
- VA loans: 0% for eligible veterans
- USDA loans: 0% for qualifying rural properties
The trade-off of a smaller down payment is a larger loan, higher monthly payment, and PMI until you reach 20% equity. Use the calculator to compare scenarios — sometimes keeping cash in reserves matters more than eliminating PMI.
Target Ratio — Choosing Your Affordability Mode
What Is the 28/36 Rule?
The 28/36 rule is the standard most conventional lenders use:
- Front-end ratio (28%): Your total monthly housing payment — principal, interest, taxes, insurance, and HOA — should not exceed 28% of your gross monthly income
- Back-end ratio (36%): Your total monthly debt payments — housing plus all other debts — should not exceed 36% of gross monthly income
Example at $10,000/month gross income:
- Maximum housing payment: $10,000 × 28% = $2,800
- Maximum total debt: $10,000 × 36% = $3,600
- Available for housing after $850 debt: $3,600 − $850 = $2,750
This is the most conservative of the three modes — and the one most financial advisors recommend for comfortable homeownership.
What Is the 31/43 FHA Rule?
FHA loans use a more lenient standard:
- Front-end ratio (31%): Housing costs ≤ 31% of gross monthly income
- Back-end ratio (43%): Total debt ≤ 43% of gross monthly income
FHA loans also require a 1.75% upfront mortgage insurance premium added to your loan balance, plus an annual MIP of approximately 0.55% of the loan amount. These costs add to your monthly payment and must be factored into affordability.
When to use 31/43 mode:
- You’re applying for an FHA loan specifically
- You have a lower credit score (580–679) or limited down payment
- You want to see the maximum a lender is likely to approve under FHA guidelines
What Is the Stretch Mode?
The Stretch mode calculates affordability at a DTI up to 45–50% — the range where some conventional lenders will approve borrowers with strong credit and compensating factors.
Important: The Stretch number is not a recommendation. It represents what a lender might technically approve. At 45%+ DTI, your housing costs consume nearly half your gross income before taxes. After income taxes, your take-home pay may leave very little for savings, retirement contributions, childcare, emergencies, or anything else.
Use Stretch mode only to understand the upper boundary — not as a spending target.
Interest Rate and Loan Term
Use the slider or enter your rate directly. For 2026, the national average 30-year fixed rate is approximately 6.3–6.7%. Your actual rate depends on your credit score, down payment, and lender.
Loan term buttons: 30yr, 20yr, 15yr
The term affects both your monthly payment and your total interest cost. A 15-year loan has a higher monthly payment but significantly lower total interest — and a lower interest rate. A 30-year loan maximises buying power by spreading payments over a longer period but costs substantially more in total interest.
Ownership Costs — The Section Most Calculators Skip
Property Tax (Annual)
Enter your estimated annual property tax. The tool divides this by 12 and includes it in your monthly housing cost — which is the correct way to calculate affordability. Many calculators skip this field entirely, producing an unrealistically low monthly payment.
Property tax rates vary enormously by state and county:
| State | Effective Tax Rate | On a $400K Home (Annual) |
|---|---|---|
| New Jersey | 2.23% | $8,920 |
| Illinois | 2.08% | $8,320 |
| Texas | 1.68% | $6,720 |
| New York | 1.47% | $5,880 |
| California | 0.76% | $3,040 |
| Hawaii | 0.28% | $1,120 |
For your specific county rate, use our Property Tax Calculator.
Home Insurance (Annual)
National average homeowners insurance runs $1,200–$2,000/year for a $400,000 home. Coastal properties, older homes, and high-value markets cost significantly more. Enter your insurance estimate and the calculator adds it to your monthly affordability calculation.
HOA Fees (Monthly)
Enter monthly HOA fees if applicable. Condos and planned communities typically have HOA fees of $100–$500/month. This amount directly reduces how much home you can afford — a $300/month HOA fee reduces your buying power by approximately $40,000 at a 28% front-end ratio on a $120,000 income.
Understanding Your Results
Estimated Affordable Home Price
This is the calculated maximum home price that keeps your housing costs within your selected target ratio, accounting for your income, debts, down payment, interest rate, and all ownership costs entered.
This number represents a budgeting estimate — not a loan approval amount. Lenders may approve you for more (or less) based on your credit score, employment history, reserves, and other factors their underwriters evaluate.
The Critical Difference — Lender Max vs Your Comfortable Max
This is the gap every first-time buyer needs to understand, and almost no calculator explains it clearly.
Lender maximum: The largest loan a lender will approve based on their DTI limits, typically 43–50% for conventional loans and up to 57% for FHA. This is what shows up in a pre-approval letter.
Your comfortable maximum: The loan amount that keeps housing costs within 28% of your gross income, leaves adequate cash flow for savings and emergencies, and doesn’t require you to choose between your mortgage and your retirement contributions.
These two numbers are often very different. A household earning $120,000 might receive pre-approval for $580,000 while their comfortable maximum — the number that allows saving 10% of income, maintaining an emergency fund, and living without financial stress — is closer to $436,000.
The calculator defaults to the 28/36 rule for this reason. Switch to Stretch mode to see what you’d be approved for — then use the 28/36 result as your actual shopping budget.
Affordable Monthly Housing and Estimated Loan Amount
Affordable Monthly Housing is the maximum monthly PITI (principal, interest, taxes, insurance) your budget supports at the selected ratio. This is the number to compare against actual mortgage quotes.
Estimated Loan Amount is your affordable home price minus your down payment — what you’d actually need to borrow.
Front-End Ratio and Back-End Ratio
Front-End Ratio is your monthly housing cost as a percentage of gross monthly income. The 28/36 rule targets ≤28%. The lower this number, the more financial breathing room you have.
Back-End Ratio is your total monthly debt — housing plus all other debt payments — as a percentage of gross monthly income. The 28/36 rule targets ≤36%. Above 43%, most conventional lenders become hesitant. Above 50%, approval requires significant compensating factors.
These two ratios are what your lender will calculate during underwriting. Understanding them before you apply helps you anticipate the outcome.
Budget Pressure Points
This section breaks down exactly where your monthly money goes:
- Principal & interest budget: The loan payment portion of your monthly housing allocation
- Taxes + insurance + HOA: The escrow-type costs added on top of P&I
- Non-housing monthly debt: Your existing debt load that competes with housing for your income
The disclaimer at the bottom — “This is a budgeting estimate, not an approval amount” — is the most important line in the results. No calculator can replicate what a lender’s underwriter does with your full file. This tool gives you a clear, realistic range to shop within.
How Much House Can I Afford Based on Income?
Income-to-Home-Price Quick Reference
At 6.7% interest, 10% down, $850/month existing debt, using the 28/36 rule:
| Annual Income | Monthly Gross | Max Housing (28%) | Estimated Home Price |
|---|---|---|---|
| $60,000 | $5,000 | $1,400 | $195,000 |
| $80,000 | $6,667 | $1,867 | $270,000 |
| $100,000 | $8,333 | $2,333 | $340,000 |
| $120,000 | $10,000 | $2,750 | $400,000 |
| $150,000 | $12,500 | $3,500 | $510,000 |
| $200,000 | $16,667 | $4,667 | $680,000 |
These are approximate figures assuming $850/month existing debt and 10% down. Your actual number changes with your debt load, down payment, and rate. Use the calculator above for your specific situation.
The 3× to 4× Income Rule of Thumb
A widely-used shortcut: most households can afford a home priced at 3–4× their annual gross income with moderate debt and a 10% down payment. At $120,000 income, that’s $360,000–$480,000.
The lower end (3×) applies when you have significant existing debt or want financial comfort. The upper end (4×) applies when debts are low and your job is secure. Beyond 4× becomes uncomfortable for most households unless income is extremely stable and growing.
This rule is a starting point. The calculator gives you the precise number.
The Three Affordability Rules — Which One Applies to You?
28/36 Rule — Conventional Loans, Conservative Budgeters
Use this if you’re applying for a conventional loan or if financial stability matters more to you than buying power. This is the rule most financial advisors recommend.
Front-end ≤28% of gross monthly income Back-end ≤36% of gross monthly income
At this ratio, most households have room for retirement savings, emergency funds, and unexpected expenses without financial stress.
31/43 Rule — FHA Loans
Use this if you’re specifically applying for an FHA loan. FHA loans are popular with first-time buyers and borrowers with lower credit scores because they require only 3.5% down and accept credit scores as low as 580.
The trade-off: FHA loans require both an upfront MIP of 1.75% (added to your loan balance at closing) and an annual MIP of approximately 0.55% for the life of the loan if you put less than 10% down. This adds to your monthly cost.
FHA loans are often the right choice for buyers with credit scores of 580–679 or limited down payment savings. For buyers with 680+ credit and 5%+ down, conventional loans often cost less over time despite slightly stricter qualification standards.
Stretch — Know Your Ceiling, Don’t Live There
The Stretch mode shows the maximum a lender might approve at 43–50% DTI. Use it to understand your ceiling, then decide how far below it you want to stay.
At 45% back-end DTI on a $10,000/month gross income, you’re committing $4,500/month to debt before taxes. After federal income tax of roughly 22%, your take-home pay is approximately $7,800. That leaves $3,300 for everything else: food, transportation, utilities, childcare, savings, insurance, entertainment, and emergencies.
That’s the Stretch scenario in practice. Know it — then choose where to actually buy.
Hidden Ownership Costs — What the Calculator Doesn’t Include
Why Your Real Monthly Cost Is Higher Than the Mortgage Payment
Every affordability calculator — including this one — calculates mortgage-based housing costs. But the true monthly cost of homeownership includes several expenses that don’t appear in a mortgage payment:
Home Maintenance (1–2% of home value annually) On a $400,000 home, budget $4,000–$8,000/year ($333–$667/month) for repairs, maintenance, and replacements. HVAC systems, roofs, appliances, plumbing, and painting all have finite lifespans. This is the cost most first-time buyers underestimate.
Utilities Homeowners typically pay 20–40% more on utilities than renters in comparable spaces — more square footage, higher ceilings, more exterior exposure. Budget an additional $200–$400/month over your current rental utility costs.
Closing Costs Plan for 2–5% of the purchase price in closing costs: origination fees, title insurance, appraisal, inspection, prepaid taxes, and insurance. On a $400,000 home, that’s $8,000–$20,000 due at closing — separate from your down payment. Use our Closing Costs Calculator to estimate your specific closing costs before you start shopping.
Moving Costs Local moves: $1,500–$5,000. Long-distance: $5,000–$15,000+. This is an immediate cash requirement on top of your down payment and closing costs.
Cash Reserves Most lenders want to see 2–6 months of mortgage payments in reserves after closing. On a $2,500/month payment, that’s $5,000–$15,000 that needs to stay liquid even after you close.
When you add these costs to the mortgage-based affordability number, your real buying power often falls 10–15% below what the calculator shows. Build this buffer into your planning from the start.
Credit Score Impact on Affordability
How Your Credit Score Changes the Number
Your credit score directly affects the interest rate you’re offered — and rate changes have a significant effect on how much home you can afford. At the same income and debt load:
| Credit Score | Estimated Rate (30yr) | Monthly P&I on $400K | Monthly Difference |
|---|---|---|---|
| 760+ | 6.3% | $2,486 | — |
| 720–759 | 6.5% | $2,528 | +$42 |
| 680–719 | 6.9% | $2,614 | +$128 |
| 640–679 | 7.4% | $2,762 | +$276 |
| 580–639 | 8.0% | $2,935 | +$449 |
A 180-point credit score difference (580 vs 760+) produces a $449/month difference in payment on the same $400,000 loan. Over 30 years, that’s $161,640 in additional interest.
If your credit score is below 720, spending 3–6 months improving it before applying can be worth tens of thousands of dollars in lifetime interest savings — and meaningfully increases your affordable home price.
Frequently Asked Questions
How much house can I afford on a $100,000 salary?
At $100,000 annual income ($8,333/month gross), the 28/36 rule allows up to $2,333/month in housing costs. With 10% down, $850/month in existing debt, and a 6.7% rate, that supports a home price of approximately $320,000–$340,000. Your actual number depends on your debt load, down payment, local taxes, and insurance costs. Enter your specifics in the calculator above for a precise estimate.
What is the difference between the 28/36 rule and the 31/43 rule?
The 28/36 rule applies to conventional loans — housing costs ≤28% of gross income, total debt ≤36%. The 31/43 rule applies to FHA loans — housing costs ≤31%, total debt ≤43%. FHA loans allow slightly more debt relative to income but require mortgage insurance premiums that add to the monthly cost. Use 28/36 for conventional loan planning; use 31/43 if you’re specifically applying for an FHA loan.
Is the bank’s pre-approval amount what I should spend?
No. Lenders calculate the maximum they will approve — often at 43–50% DTI — not the amount that will leave you financially comfortable. Pre-approval reflects their risk tolerance, not your lifestyle. A household approved for $600,000 may find that a $420,000 purchase fits their actual financial goals much better. Use the 28/36 mode in the calculator for a realistic spending target, and treat the Stretch mode as your ceiling.
How does my down payment affect affordability?
A larger down payment reduces your loan amount, lowers your monthly payment, and eliminates PMI once you reach 20%. Every $10,000 of additional down payment reduces your monthly P&I by approximately $65–$70 at 6.7% on a 30-year loan — which translates to roughly $9,000–$12,000 of additional home buying power. The trade-off is having less cash after closing for reserves, repairs, and emergencies.
What is PMI and when do I need it?
PMI (Private Mortgage Insurance) is required on conventional loans when your down payment is less than 20% of the home price. It protects the lender — not you — against default. Typical annual cost: 0.5%–1% of the loan amount. On a $350,000 loan, that’s $145–$290/month added to your payment. PMI can be cancelled once your loan balance reaches 80% of the original home value. FHA loans have a similar requirement called MIP, but it lasts for the life of the loan if you put less than 10% down.
How does existing debt affect my home buying power?
Every $100 of monthly debt payment reduces your affordable home price by approximately $12,000–$15,000. If you have $850/month in existing debt (car loan + student loan minimums), you’ve already committed $10,200/year of your income to non-housing debt — which directly reduces the mortgage payment lenders will approve. Paying off a $400/month car loan before applying can add $50,000–$60,000 to your buying power.
Should I use a 15-year or 30-year mortgage for affordability?
A 30-year mortgage maximises affordability because it spreads payments over a longer period — lower monthly payment, higher buying power. A 15-year mortgage has a significantly higher monthly payment but builds equity faster and costs less in total interest. For affordability planning, model both in the calculator. If the 15-year payment puts you above 28% front-end ratio, the 30-year is the practical choice. If you can manage the 15-year payment comfortably, you’ll save substantially in total interest.
What income do I need to afford a $500,000 house?
To comfortably afford a $500,000 home using the 28/36 rule, with 10% down, 6.7% rate, and $500/month in existing debt, you need approximately $140,000–$150,000 in annual household income. At $120,000 income, a $500,000 home typically exceeds the 28% front-end threshold unless you have a very low debt load or a larger down payment. Enter your specific numbers in the calculator for a precise answer.
Related Calculators
Once you know your affordable home price, the next step is understanding your actual monthly payment in detail — including property tax, insurance, PMI, and HOA — using our Mortgage Calculator. This shows the true PITI payment, not just principal and interest.
For a complete amortization schedule showing how each payment splits between principal and interest over the life of your loan, use the Mortgage Amortization Calculator.
When you’re ready to make an offer, our Closing Costs Calculator estimates the cash you’ll need at the table — lender fees, title costs, prepaid taxes, and insurance — which is separate from your down payment.
If you’re considering tapping your home’s equity after purchase, the HELOC Calculator estimates your available credit line based on your home value and remaining mortgage balance. And for property tax estimates specific to your county, the Property Tax Calculator uses local rates rather than national averages.
Data Source
Affordability calculations in this calculator follow the qualifying ratios published by the Consumer Financial Protection Bureau (CFPB) under Qualified Mortgage (QM) rules (12 CFR Part 1026, Regulation Z): the 28% front-end ratio (housing costs ÷ gross monthly income) and 43% back-end DTI ceiling used by most conventional lenders for QM eligibility.
The 28/36 rule is the traditional underwriting guideline documented in Fannie Mae Selling Guide (B3-6-02) and Freddie Mac Single-Family Seller/Servicer Guide — the standard for conventional conforming loans.
2026 conforming loan limits are sourced from the Federal Housing Finance Agency (FHFA) annual baseline announcement: $806,500 for single-family properties in most US counties, with higher limits in designated high-cost areas (up to $1,209,750).
PMI rate estimates (0.5%–1.0% of loan amount annually) reflect 2026 benchmark ranges published by the Urban Institute’s Housing Finance Policy Center. PMI cancellation at 80% LTV follows the Homeowners Protection Act (HPA, 12 USC § 4901).
Property tax and insurance estimates used in the all-in monthly payment calculation are based on state median figures from the U.S. Census Bureau ACS 5-year estimates (2020–2024) and the Insurance Information Institute (III) state-level homeowner’s insurance data (2024).
Results are estimates for planning purposes only. Actual loan approval, rate, and maximum purchase price depend on your credit score, employment history, asset documentation, and individual lender guidelines.