Home Affordability Calculator
DTI-based · Income guidelines · Max purchase price
Car, student loans, credit cards
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Max Home Price
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Conservative Budget
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Max Loan Amount
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Back-End DTI
About This Calculator
The Home Affordability Calculator uses real mortgage lending guidelines to determine how much home you can afford. Lenders evaluate two key ratios: the front-end DTI (housing costs ÷ gross income, max 28%) and the back-end DTI (all debts ÷ gross income, max 36–43%).
Just because a lender will approve you for a certain amount doesn't mean you should borrow that much. Many financial advisors recommend spending no more than 25–28% of gross income on housing to maintain financial flexibility.
Key factors: Income (higher income = higher budget), Debts (more debt reduces your home budget), Down payment (larger down = smaller loan needed), and Interest rate (even 0.5% difference significantly impacts affordability).
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Frequently Asked Questions
What is the 28/36 rule for mortgages?▼
The 28/36 rule states: spend no more than 28% of gross monthly income on housing costs (front-end DTI) and no more than 36% on all debts combined (back-end DTI). Most conventional lenders use these thresholds, though some allow up to 43% back-end DTI.
How does my credit score affect home affordability?▼
A higher credit score qualifies you for lower interest rates, which directly increases your affordability. Moving from a 680 to 760 credit score could lower your rate by 0.5–1%, translating to $30,000–$60,000 more purchasing power on a $400,000 home.
How much should I have saved before buying a home?▼
Beyond the down payment, budget for: closing costs (2–5% of purchase price), moving expenses ($1,000–$5,000), immediate repairs/updates, and a 3–6 month emergency fund. Buying a home often costs $15,000–$30,000+ beyond the down payment.
Is it better to put more money down?▼
A larger down payment reduces your monthly payment, eliminates PMI at 20%+, and means less interest paid over time. However, tying up cash in a home reduces liquidity. Many investors prefer 20% down and invest the rest, especially if mortgage rates are below expected investment returns.
Can I afford a home on a single income?▼
Yes, but budget carefully. Use 25% of your gross income as a housing cost guideline. Keep 6 months of expenses as an emergency fund. Single-income buyers are more vulnerable to job loss, so a conservative budget is essential.
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