This house affordability calculator estimates the most you can spend on a home based on your income, debts and down payment. It uses common lender guidelines and includes property tax, insurance and HOA fees in the payment.
The 28/36 rule
Many lenders look at two ratios. Your total housing payment should be no more than about 28% of gross monthly income, and all debt payments together, housing included, no more than about 36%. The stretch setting uses 31% and 43%, closer to the upper limits some loan programs allow.
Worked example
With $100,000 a year in income, $500 of other monthly debts and $60,000 down, at 6.5% for 30 years with 1.1% property tax and $1,800 a year insurance, you could afford a home of about $354,000 under the conservative rule.
Frequently asked questions
Why does the estimate drop with car or student loans?
Those payments count toward the 36% limit, leaving less room for a housing payment.
Does it include PMI?
No. If you put down less than 20%, mortgage insurance adds to the payment. Estimate it with the PMI calculator.