Home Affordability Calculator
Determine the maximum home price you can comfortably afford based on your income, existing debts, down payment, and standard debt-to-income ratios used by lenders.
How It Works
Lenders use two key ratios to determine how much you can borrow. This calculator computes the maximum home price under each constraint, and the affordability max uses the stricter (lower) of the two ratio limits.
Front-End Ratio (Housing Expense Ratio)
This measures your total housing cost (principal, interest, taxes, insurance, HOA) as a percentage of gross monthly income. The standard maximum is 28-31%.
Back-End Ratio (Total DTI)
This includes all housing costs PLUS existing debt payments (car loans, student loans, credit cards) as a percentage of gross income. Most lenders cap this at 43%.
Converting Payment to Home Price
Once the maximum monthly housing payment is determined, the calculator uses the reverse mortgage formula to find the maximum loan amount, then adds your down payment cash to get the maximum home price.
Frequently Asked Questions
What DTI ratio should I aim for?
Most lenders prefer a total (back-end) DTI of 43% or less. A front-end ratio of 28-31% is typical. Lower ratios give you more financial cushion.
Does this include PMI?
No. If your down payment is less than 20% of the home price, you will likely need Private Mortgage Insurance (PMI), which adds to your monthly cost. Factor this in separately.
Why are there two different max prices?
The front-end ratio only considers housing costs. The back-end ratio also includes your other debts. The lower of the two is your binding constraint — use the recommended range for a safe estimate.
Should I use gross or net income?
Gross (pre-tax) income is the standard for mortgage qualification. Lenders use your gross income before any deductions.
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