Home Affordability Calculator
Lenders judge affordability with two ratios. Housing should stay under twenty-eight percent of gross income and total debt under thirty-six percent, and the tighter of the two caps your mortgage payment.
Maximum home price
$262,813.57
- Max monthly housing payment
- $1,866.67
- Max mortgage payment
- $1,408.33
- Max loan amount
- $222,813.57
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
Housing cap = 0.28 x gross monthly income; Debt cap = 0.36 x income - other debts
- income
- Gross monthly income
- debts
- Other monthly debt payments
- cap
- The tighter of the two ratio limits
- down
- Cash paid toward the price
How to check the result by hand
- 1
Start from gross monthly income
Divide annual gross income by twelve. Everything in the 28/36 rule is measured against this figure.
- 2
Apply the 28% rule
Multiply gross monthly income by 0.28 to get the housing cap. This includes tax and insurance, not just the mortgage.
- 3
Apply the 36% rule
Multiply income by 0.36 and subtract your other monthly debt payments. This is the back-end cap on housing plus debt.
- 4
Take the lower cap and subtract tax and insurance
The tighter of the two caps is the constraint. Subtract the monthly share of property tax and insurance to leave the mortgage payment.
- 5
Convert to a loan and add the down payment
Use the reverse amortisation formula to turn the payment into a loan, then add the down payment to get the maximum home price.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Home Affordability page.