fincalculatorHouse Affordability Calculator
Use this free House Affordability Calculator to find out how much home you can afford. Simple, accurate, and easy to use online.
The House Affordability Calculator answers the big question: "How much house can I buy?" It uses standard lender qualification ratios (Front-end 28% / Back-end 36%) to reverse-engineer your maximum home price based on your income and debts.
Instead of guessing a monthly payment, this tool starts with your financial reality—Income, Debts, and Down Payment—to determine your borrowing ceiling.
When to Use This Calculator
Use this calculator before you start looking at homes. It mimics the "Pre-Qualification" process used by banks.
Example Scenario
Annual Income: $80,000.
Monthly Debts: $500.
Down Payment: $40,000.
28% Rule (Front-End): Max housing payment is $1,866/mo.
36% Rule (Back-End): Max total debt is $2,400/mo. Minus $500 debts = $1,900/mo for housing.
The lower limit ($1,866) sets your budget. At 6.5% interest, this translates to a home price around $300,000 - $320,000 depending on taxes and insurance.
Formula & Calculation Method
Formula Used
Variable Explanation
- Inputs: User provided values
- Result: Calculated output
Step-by-Step Calculation
- 1. Process user inputs.
- 2. Apply standard financial formulas specific to this calculator type.
- 3. Display result.
Interpretation Notes
Refer to specific financial literature for the exact derivation of this specific calculator.
How to Interpret the Results
Affordable Home Price: This is the maximum Purchase Price. It includes your Down Payment.
Max Monthly Payment: This is your PITI limit (Principal, Interest, Taxes, Insurance). Lenders generally won't approve a loan if your payment exceeds this.
Common Mistakes
Assuming Pre-Approval = Affordability: Just because a bank will lend you $500k doesn't mean you should borrow it. Always leave room for lifestyle expenses.