CalcDuck

Home Affordability Calculator

Home Affordability Calculator

$
$
Car loans, credit cards, student loans, etc. — not including housing.
$
%
years
%
36% is the back-end figure in the commonly cited 28/36 guideline, not a hard rule — adjust to match your lender.
Maximum home price
$403,884.88
Maximum loan amount
$363,884.88
Affordable monthly housing payment
$2,300.00

On a $90,000 income with $400 in other monthly debts, a $40,000 down payment, a 6.5% rate over 30 years, and a 36% target debt-to-income ratio, the affordable monthly payment is $2,300, which supports a maximum loan of about $363,885 and a maximum home price of about $403,885.

Tip: “Copy with settings” shares a link that opens this calculator with your numbers already filled in.

How this calculator works

This calculator estimates the maximum home price you can reasonably finance by working backward from a target debt-to-income ratio. It first finds how much monthly payment fits your income and existing debts, then converts that payment into a maximum loan amount using the standard mortgage amortization formula in reverse, and finally adds your down payment to get a maximum price.

The default 36% target reflects the back-end figure in the commonly cited "28/36 rule": no more than 28% of gross income on housing costs alone, and no more than 36% on housing plus all other debt combined. It is a widely used guideline, not a regulation, and individual lenders set their own limits based on credit, reserves and loan type — treat the result here as a starting estimate to refine with an actual lender.

The formula

Affordable monthly payment = (Monthly gross income × target DTI%) − other monthly debtsMaximum loan (inverse amortization): P = M × (1 − (1 + i)^−n) ÷ iMaximum home price = maximum loan + down payment

Monthly gross income is annual income ÷ 12. i is the monthly mortgage rate (annual rate ÷ 12) and n is the loan term in months. The inverse formula is the standard payment formula solved for principal instead of payment, and round-trips exactly with it.

Worked example: $90,000 income, 36% target DTI, 6.5% rate over 30 years

  1. Monthly gross income = 90,000 ÷ 12 = $7,500; at a 36% target DTI, maximum total debt payment = 7,500 × 0.36 = $2,700.
  2. Subtract $400 in existing monthly debts: affordable housing payment = 2,700 − 400 = $2,300.
  3. Monthly rate i = 0.065 ÷ 12 = 0.005417; over 360 months, maximum loan = 2,300 × (1 − 1.005417^−360) ÷ 0.005417 ≈ $363,885.
  4. Add the $40,000 down payment: maximum home price ≈ 363,885 + 40,000 = $403,885.

Frequently asked questions

Where does the 28/36 rule come from?

It is a long-standing mortgage-industry rule of thumb: no more than 28% of gross income toward housing costs alone (the front-end ratio) and no more than 36% toward housing plus all other recurring debt (the back-end ratio). It predates and is separate from any specific lender's or program's current underwriting rules, which vary and can allow higher ratios in some cases.

Why does the calculator let me change the 36% target?

Because actual limits differ by lender, loan program and borrower profile — some conventional and government-backed loans allow back-end DTI above 43% in certain circumstances. Adjusting the target lets you see how a stricter or more lenient limit changes the maximum price.

Does this include property tax, insurance or HOA fees?

No — it estimates the loan principal and interest payment your income can support. Real housing costs typically also include property tax, homeowners insurance and possibly HOA dues, which reduce how much loan payment you can actually afford within the same target ratio.

What counts as "other monthly debts"?

Recurring debt obligations such as car loans, minimum credit card payments, student loans and personal loans — the same figure used in a standard debt-to-income calculation. Everyday living expenses like groceries or utilities are not counted as debt.

Will a lender actually approve me for this exact amount?

Not necessarily. Lenders also weigh credit score, employment history, cash reserves, and specific program rules that this calculator does not model. Use the result as a planning estimate, then confirm actual affordability with a lender's pre-approval.

Sources

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