How to use it
- Enter your annual income.
- Add any other monthly debt payments.
- Set your down‑payment, interest rate, loan term, and front‑end DTI ratio.
- View the maximum loan amount and home price.
What it does The Home Affordability Calculator takes your financial inputs—annual income, existing monthly debt, down‑payment, mortgage rate, loan term, and the 28 % front‑end DTI limit—to show two key numbers: the highest loan you could qualify for and the corresponding home price you could purchase.
Why it matters Knowing these limits helps you set a realistic house‑hunting budget, avoid over‑extending yourself, and speak confidently with lenders.
How to read the results
- Maximum Loan Amount – the principal you could borrow while keeping housing costs at or below 28 % of your gross income.
- Maximum Home Price – the loan amount plus your down‑payment, representing the top price you should consider.
All calculations assume monthly compounding and ignore taxes, insurance, and HOA fees for simplicity.
Pro tips
- Add a small buffer above the 28 % limit to cover future expenses.
- Round your down‑payment to the nearest $5,000 for easier loan‑to‑value estimates.
- Enter the exact loan term in whole years; the calculator handles months automatically.
- Make sure all debt payments are monthly amounts; divide annual obligations by 12.
Real-life examples
- First‑time buyer figuring out how much house they can look at while keeping payments affordable.
- Real estate investor estimating the highest purchase price for a rental property under a strict cash‑flow rule.
- Mortgage broker preparing a quick affordability snapshot for a client during a consultation.
Case study
Emily earned $85,000 a year, had $400 in monthly debt, and could put $30,000 down. After entering her numbers, the calculator showed a $250,000 loan limit and a $280,000 maximum home price, letting her focus her search on homes she could comfortably afford.