Home Affordability Calculator — How Much House Can I Afford?
The home price your income supports under front-end and back-end debt ratios, with the payment breakdown, a comfortable and a stretch estimate, and the effect of a one-point rate change — any currency.
| Maximum monthly housing payment | — |
|---|---|
| Which ratio binds | — |
| Loan amount / down payment | — |
| Payment breakdown at that price | — |
| Comfortable (25% of take-home) estimate | — |
| Stretch (43% back-end) estimate | — |
| Price-to-income multiple | — |
| If rates were 1 point lower / higher | — |
In short
Lenders size a mortgage on two ratios: housing costs up to 28% of gross monthly income (front-end) and all debt payments up to 36% (back-end), with 43–50% allowed by some. The lower budget is converted to a price by solving the payment formula backwards and adding the down payment. A 110,000 income with 600 of monthly debt and 60,000 down supports about 365,000 at 6.5%.
Who this is for: Buyers in the US and any ratio-based market working out a realistic price before house-hunting.
How 'how much house can I afford' is decided
- Front-end ratio: housing costs (principal, interest, tax, insurance, PMI, HOA) ÷ gross monthly income — classically 28%.
- Back-end ratio: housing + all other debt payments ÷ gross income — classically 36%, up to 43–50% for strong files. Whichever gives the smaller budget wins; car loans and student loans often turn out to be the real limit.
- The budget is converted to a price by solving the payment equation backwards for the loan, then adding the down payment — so a bigger deposit raises the price twice: directly, and by removing PMI.
- Rates matter more than people expect: one percentage point moves the affordable price by roughly 9–10% at today's rates.
- The "comfortable" line is the budgeting view — housing at a quarter of take-home pay — which is what most people mean by affordable.
Assumptions
- Housing budget = min(income × front-end ratio, income × back-end ratio − other debts) per month.
- Price solved numerically so that P&I + tax + insurance/HOA + PMI (when LTV > 80%) equals the budget, with the down payment added to the loan.
- Comfortable = 25% of take-home assuming 25% tax; stretch = min(front-end × 1.2, 43% back-end).
Worked example
Monthly caps: 2,567 front-end, 2,700 back-end after debts → budget 2,567. That supports a price of about 365,000 with a 305,000 loan (84% LTV, so PMI applies): P&I 1,929 + tax 335 + 150 + PMI 153. Comfortable estimate (25% of take-home) about 269,000; stretch at 43% about 432,000. At 5.5% the same budget buys about 393,000; at 7.5%, about 341,000.
Frequently asked questions
How much house can I afford on 100,000 a year?
Around 330,000–380,000 with a 10–15% deposit at 6.5% and modest other debt under the 28/36 rule; more with a larger deposit or lower rate. Enter your figures for the exact number.
Is the 28/36 rule still used?
It is the conservative benchmark; US lenders often approve up to 43–45% back-end, and some higher with compensating factors. Approval is not the same as comfort.
Does the down payment count toward affordability?
Yes — it is added to the loan the payment supports, and reaching 20% removes mortgage insurance, which lifts the price further.
What about the UK or UAE?
UK lenders cap borrowing at 4–4.5× income (use the UK calculator); UAE banks cap the debt-burden ratio at 50% and LTV at 80–85% (use the UAE calculator). This global tool uses the US-style ratio method.
How much house can I afford on 80,000 a year?
Roughly 260,000–300,000 with 10% down at 6.5% and little other debt under the 28/36 rule.
What debt-to-income ratio do lenders allow?
Conventional US lenders generally cap total debt at 43–45% of gross income, FHA up to 50% with strong compensating factors; 36% is the conservative planning figure.
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