Home Affordability Calculator USA | How Much House Can I Afford?

Home Affordability Calculator USA

How Much House Can I Afford?

Calculate your home buying budget based on your income, debts, and down payment

Annual Gross Income ($)

Monthly Debts ($)

Down Payment ($)

Loan Term (years)

Interest Rate (%)

Loan Type

Annual Property Tax ($)

Annual Home Insurance ($)

Maximum Home Price

$385,000

Monthly Mortgage Payment

$2,198

Loan Amount

$345,000

Front-End Ratio

28%

Back-End Ratio

36%

Affordability Details

DTI Ratios Explained

Based on your inputs and the Conventional Loan guidelines:

• Your maximum affordable home price is $385,000

• Your estimated monthly mortgage payment will be $2,198

• Your front-end ratio is 28% (housing costs vs gross income)

• Your back-end ratio is 36% (all debts vs gross income)

Debt-to-Income (DTI) Ratios

Front-End Ratio = Monthly Housing Costs / Monthly Gross Income

This measures what percentage of your income would go toward housing expenses.

Back-End Ratio = (Monthly Housing Costs + Other Monthly Debts) / Monthly Gross Income

This measures what percentage of your income would go toward all debt obligations.

What is Home Affordability?

Home affordability refers to the maximum home price you can comfortably afford based on your income, debts, down payment, and other financial factors. Lenders use debt-to-income ratios to determine how much they’re willing to lend you.

Understanding Loan Types

Conventional Loans: Follow the 28/36 rule (housing costs ≤ 28% of income, total debts ≤ 36% of income)
FHA Loans: More flexible with 31/43 ratios, require mortgage insurance
VA Loans: For veterans, with a 41% back-end ratio requirement

How to Improve Your Home Affordability

Increase your down payment savings
Pay down existing debts
Improve your credit score for better interest rates
Consider a longer loan term for lower monthly payments
Look for homes in more affordable areas

Additional Costs to Consider

Property taxes
Homeowners insurance
Private mortgage insurance (if down payment < 20%)
Homeowners association (HOA) fees
Maintenance and repair costs

Frequently Asked Questions

What is the 28/36 rule?

The 28/36 rule is a common guideline used by lenders: your monthly housing costs should not exceed 28% of your gross monthly income, and your total monthly debt payments (including housing) should not exceed 36% of your gross monthly income.

How does my down payment affect affordability?

A larger down payment reduces your loan amount, which lowers your monthly mortgage payment and may help you avoid private mortgage insurance (PMI). This can significantly increase the home price you can afford.

What is included in the front-end ratio?

The front-end ratio includes principal, interest, property taxes, homeowners insurance, and any homeowners association (HOA) fees. It represents all costs associated with owning the home.

How can I afford more house?

To afford more house, you can: increase your income, save for a larger down payment, pay down existing debts, improve your credit score to qualify for better rates, or consider a longer loan term.