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Mortgage Affordability Calculator

One of the most important things you can do when shopping for real estate is determine how much mortgage you can afford (assuming you aren’t paying all-cash).

The best way to do this is with a mortgage calculator, not a bar napkin.

After all, if you don’t know what you can actually afford to spend, you could be in a for a rude awakening when it comes time to apply for a mortgage.

Or you might just waste a lot of your time (and the time of others, like real estate agents, home sellers, etc.).

In reality, you probably won’t get that far without at least getting a mortgage pre-approval. Real estate agents won’t take you seriously, and home sellers likely won’t give you the time of day.

Mortgage Affordability Calculator

Find out how much house you can afford based on your income, monthly debts, down payment, and mortgage rate — both a comfortable price and the maximum price lenders may allow for Conventional, FHA, VA, and USDA loans.

Income & Savings

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Salary, wages, self-employment, or other qualifying income
$
Bonus, overtime, a co-borrower’s income, etc.
$
Caps the price if your savings run out before your income does
%
Leave blank to use 20%

Loan & Housing Costs

💡 Property taxes and insurance vary a lot by location, so adjust the defaults below if you know your numbers. If you put down less than 20%, mortgage insurance is estimated automatically.
%
%
Annual, as a % of home price
%
Annual, as a % of home price
$

Monthly Debt Payments

💡 Only include recurring debts: installment loans, minimum credit card payments, and support obligations. Leave out utilities, groceries, insurance premiums, or debts with 10 or fewer payments remaining.
$
$
$
$
Personal loans, child support, alimony, etc.

Maximum Price by Loan Type

Comfortable uses the classic 28/36 rule of thumb. The loan types show the standard maximum price lenders may allow, which leaves a tighter budget. With strong compensating factors (a high credit score, cash reserves, or a low payment increase, for example), some approvals go higher, and FHA and VA loans can stretch further than conventional. That is shown in the amounts underneath, but it is the exception rather than the rule, and actual limits vary by lender and automated underwriting findings.

How Your Down Payment Changes It

Maximum assumes the standard 45% conventional limit. Strong compensating factors can raise it.

How the Interest Rate Changes It

Even small rate changes move your buying power, because more of each payment goes to interest.

Itemized Monthly Estimate (Comfortable Price)

Flip It Around

[Searching for a home loan? See your options with dozens of lenders fast.]

Already have a specific home in mind? See how much you would need to earn to buy it with my income needed to buy a house calculator.

Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, legal, or tax advice. It does not guarantee mortgage approval or a specific interest rate. The calculation works from your gross (pre-tax) monthly income and monthly debts, using the debt-to-income (DTI) limits of each guideline to find the highest monthly housing payment allowed, then solves for the home price that produces that payment. Comfortable uses 28% of gross income for housing and 36% for total debt; Conventional about 45% total debt; FHA 31% and 43%; VA about 41% total debt; and USDA 29% and 41%. These are general industry benchmarks, not hard cutoffs. With strong compensating factors, approvals can go higher, and the “up to” prices shown for each loan type assume total debt of about 50% (Conventional), 57% (FHA), 60% (VA), and 44% (USDA) with no separate housing-ratio cap; these are upper-end estimates, not typical approvals, and the VA also considers residual income. Prices are rounded down to the nearest $1,000. Principal and interest use a standard fixed-rate amortization formula. Property tax and homeowners insurance are estimated as a percentage of the home price. Mortgage insurance is a rough estimate of 0.5% of the loan amount per year when the down payment is under 20%; your actual cost depends on your loan type and credit score. If you enter cash saved, it is treated as the down payment only, and closing costs, reserves, and moving costs are additional. Credit history, employment history, and the appraisal also affect approval and are not included. Consult a licensed mortgage professional for a pre-approval based on your actual finances.

How to Use the Mortgage Affordability Calculator

The mortgage affordability calculator above can give you a head start in front of other prospective home buyers competing for the same property.

  • First enter your gross income and monthly liabilities
  • Then consider your down payment, loan type, and mortgage rate
  • Don’t forget the extras like homeowners insurance and property taxes
  • You can use the comfortable or max ratios to determine the maximum purchase price you can afford
  • Just remember that it’s good to live at or even below your means, even if the lender says you can borrow more!

The first step to using this mortgage calculator is to enter your gross annual income, which is your salary before taxes for you and any co-borrowers that might also be on the home loan. It can be your annual household income if you and a spouse will both be on the mortgage and making the loan payment.

Next, enter all your minimum monthly credit card payments that show up on your personal credit report (business credit cards typically won’t show up other than ones issued by Capital One). You can use a free site like Credit Karma to gather all these amounts. Note that they can change from month to month based on your revolving balances, but this will at least give you a good ballpark idea of affordability.

Do the same for any auto loans or leases you may have, and any other fixed monthly debts that show up such as student loans, personal loans, etc.

You basically want all your monthly liabilities accounted for, as they all eat into how much you’ll have leftover for a mortgage payment.

The next key detail is down payment because that will greatly affect home affordability. Someone able to put down 20% will have a much smaller loan amount than someone only able to muster 3.5% down with an FHA loan.

So really two questions need to be answered here – you have to determine how much house and how much mortgage you can afford based on the purchase price and down payment.

Same goes for mortgage rate – the lower the interest rate the more you’ll be able to afford, all else being equal.

Assuming you’re looking at adjustable-rate mortgages, you may still want to enter the higher, comparable 30-year fixed rate because the mortgage lender may qualify you differently for an ARM. And by differently, I mean unfavorably because they know ARMs tend to adjust higher.

If you’re planning to put down 20% and have a solid credit score, you can probably enter those best-case mortgage rates you see advertised. If you don’t have a great credit score and your down payment is limited, you’d be smart to enter in a higher interest rate to more accurately ballpark home affordability.

Finally, select a loan term – most will go with the default 30-year term, though 15-year mortgages are also fairly popular, just not for most first-time home buyers.

Lastly, enter your homeowner’s insurance and property taxes as a monthly figure (annual total divided by 12). And also monthly mortgage insurance and HOA dues if applicable.

The mortgage affordability calculator above will spit out the home price you can afford based on your income, monthly debt payments, down payment, and mortgage rate.

It also shows the loan amount you’d need, along with your estimated monthly housing payment.

You’ll get two kinds of answers:

The first is a so-called comfortable price, based on the classic 28/36 rule. That means no more than 28% of your gross income can go toward housing, and no more than 36% to all of your debts combined.

The second is the maximum price you might qualify for with a conventional, FHA, VA, or USDA loan, based on each program’s debt-to-income ratio (DTI ratio) limits.

Lenders will often let you go higher than the comfortable number. But just because you can doesn’t mean you should.

It’s always good to leave a little cushion in case anything is left out or underestimated, which is often the case.

Lastly, note that home affordability calculators are only as good as the information you provide. If you leave things out or underestimate everything to get a favorable mortgage payment, you might actually be doing yourself a disservice. I always recommend doing the opposite (overestimating) so you can prepare for the worst.

For some reason, housing payments always tend to creep higher than anticipated.

Happy house hunting!

Colin Robertson
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