Home affordability calculator.
How much home fits your budget? Enter income, debts and cash, set your debt-to-income limits, and see a price range with the monthly payment behind it.
Monthly payment at the top of the range
Where your monthly income goes
Gross income at the top of the range, before taxes.
Share the result
How to use this and what the numbers mean.
Enter your gross monthly income, which is income before taxes and deductions, and your monthly debt payments: car loans, student loans, minimum credit card payments, child support and similar bills. Leave out rent you will stop paying and everyday costs like food and utilities.
Lenders look at two debt-to-income ratios. The front ratio is your housing payment divided by your gross monthly income. The back ratio is housing plus all your other monthly debts, divided by the same income. A common guideline is 28% for the front ratio and 36% for the back ratio, so those are the defaults. Many loan programs allow higher ratios, depending on credit, savings and the program. You can change both.
The calculator finds the largest monthly housing payment both ratios allow, then works backward to a home price. That payment includes principal and interest, property tax (entered as a yearly percent of the price), homeowners insurance, HOA dues and PMI when the down payment is under 20% of the price. The result tells you which ratio sets the limit.
The high end of the range uses your limits exactly. The low end uses limits 3 points lower on each ratio, which leaves room for savings, repairs and surprises. A price you can qualify for is not always a price you are comfortable paying, so look hard at the monthly payment, not just the price.
Your down payment counts twice. It lowers the loan, and once it reaches 20% of the price PMI drops out. That is why the top price can jump when you add a little more cash.
Closing costs, moving costs and savings for after you move need cash too, on top of the down payment. Lenders also check credit, job history and reserves, so treat this as a starting point for a conversation with a licensed lender you choose.
Questions
What is a good debt-to-income ratio for buying a home?
A common guideline is 28% of gross monthly income for housing and 36% for housing plus all other debts. Many loan programs allow higher ratios, sometimes 43% to 50% for the back ratio, depending on credit, savings and the program. Lower ratios leave more room in your budget.
Does this include closing costs?
No. The down payment you enter goes toward the price. Closing costs, moving costs and cash reserves are extra, so plan for them separately.
Is this a pre-approval?
No. It is an estimate for planning. It is not a loan offer or pre-approval. Only a licensed lender can review your credit, income and savings and tell you what you qualify for. You choose the lender.
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