Home Affordability Calculator: How Much House Can I Afford?

How affordability is worked out

The calculator finds the most you can spend on housing each month as the lower of two limits: the housing ratio (28% of gross monthly income) and the total-debt ratio (36% of income minus your other debt payments). It then searches for the highest home price whose full monthly cost, mortgage payment plus property tax, insurance, HOA and PMI if you put down less than 20%, fits within that limit.

Example: $100,000 income

Gross monthly income is $8,333. The 28% limit allows $2,333 for housing; the 36% limit allows $3,000 minus $500 of other debt, or $2,500. The lower figure, $2,333, applies. With $40,000 down at 6.5% over 30 years, 1.1% property tax, $1,800 a year insurance and PMI (because $40,000 is under 20% down), that payment supports a home of about $320,000.

Don't forget the upfront costs

• Closing costs are usually 2% to 5% of the price, about $6,400 to $16,000 on a $320,000 home.
• Moving and furnishing costs can add thousands more.
• An emergency fund for repairs: a common guide is 1% of the home's value each year for maintenance.

Check the full payment breakdown, with an amortization schedule, in the mortgage calculator.

Frequently asked questions

How much house can I afford on $100,000 a year?

With $500 a month of other debt, $40,000 down, a 6.5% rate and typical taxes and insurance, about $320,000 using the 28/36 rule. The 28% housing limit allows a total payment of about $2,333 a month.

What is the 28/36 rule?

Spend no more than 28% of gross monthly income on housing (mortgage, property tax, insurance, PMI, HOA), and no more than 36% on housing plus all other debt payments.

Can I get approved for more than this?

Often yes. Some loans allow a total debt-to-income ratio of 43% to 50%. But being approved for a payment and being comfortable with it are different; leave room for savings, repairs and the rest of life.

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