House Affordability Calculator
Enter Financial Profile
Affordability Results
| Affordable Home Price | — |
|---|---|
| Mortgage Loan Amount | — |
| Monthly Mortgage P&I | — |
| Monthly PMI Payment | — |
| Monthly Property Tax | — |
| Monthly Home Insurance | — |
| Monthly HOA Fee | — |
| Total Monthly Housing Cost | — |
| Achieved Front-End DTI | — |
| Achieved Back-End DTI | — |
Understanding House Affordability
Lenders evaluate your borrowing capacity using debt-to-income (DTI) ratios. Specifically, they look at the **28/36 rule**:
- **Front-end DTI (28%):** Your total monthly housing costs (principal, interest, property tax, homeowners insurance) should not exceed 28% of your gross monthly income.
- **Back-end DTI (36%):** Your total monthly debt obligations (housing costs + car loans, credit cards, student loans) should not exceed 36% of your gross monthly income.
Affordability Calculations
This calculator estimates property tax at 1.2% of the home price annually and homeowners insurance at 0.3% of the home price annually. By solving for the home price ***X***:
- ***X = [ MaxMonthly + DownPayment × k ] / [ k + 0.00125 ]***
Where ***k*** is the monthly amortization factor:
- ***k = [ i(1 + i)ⁿ ] / [ (1 + i)ⁿ - 1 ]***
Disclaimer. This calculator is for educational purposes. Real-world borrowing limits depend on credit scores, down payment programs, employment history, and local market factors. Consult a mortgage professional before committing to a home purchase.