How to use it
- Enter your annual gross income.
- Add your down‑payment %, annual mortgage interest rate, loan term, and any other monthly debt payments.
- Press Calculate to see the affordable home price.
What it does – The calculator takes your annual gross income, down‑payment percentage, loan terms and other monthly debts, then applies the standard 28% housing expense ratio and 36% total debt‑to‑income limit. It converts the allowed monthly mortgage payment into a loan amount using the mortgage payment formula and adds your down‑payment to show the total home price you can realistically purchase. Why it matters – Knowing your affordable price helps you focus on listings you can actually close, avoids wasted time, and protects you from over‑leveraging. How to read it – The result is the highest purchase price that keeps your mortgage payment and all debts within the 36% DTI ceiling. Use it as a starting point for budgeting and house hunting.
Pro tips
- Round your income to the nearest thousand for a quick estimate, then refine with exact numbers.
- If you have irregular debt payments, use the average monthly amount for accuracy.
- Enter the down‑payment as a percent of the price you plan to put down, not the loan amount.
- Double‑check that the interest rate is the annual rate; the calculator converts it to a monthly rate automatically.
Real-life examples
- First‑time buyer figuring out how much house they can qualify for before talking to a lender.
- Real estate investor estimating the maximum purchase price for a rental property while keeping cash flow positive.
- Couple planning to upgrade to a larger home and needing a realistic price ceiling based on their combined income and existing car loan.
Case study
Sarah earned $95,000 a year, had $400 in monthly car payments, and could put 15% down. The calculator showed a $420,000 affordable price, letting her target homes within her budget and skip over‑priced listings.