Home Affordability Calculator

Lenders rarely let your total monthly debt payments exceed a set share of your gross income — the debt-to-income (DTI) ratio, commonly around 36%. This calculator takes that ceiling, subtracts the debts you already pay each month, and treats whatever is left as the maximum your mortgage payment can be.

That payment is then run through the loan formula in reverse. A fixed monthly payment, an interest rate, and a term together imply one specific loan size — the largest balance whose payments exactly match your budget. Adding your down payment to that loan gives the highest home price you can afford.

Because the math is the inverse of a standard mortgage payment, lowering the rate or lengthening the term both raise the price you qualify for — though a longer term means far more interest over the life of the loan.

On an 80,000 annual income with 500 in existing monthly debts and a 36% DTI limit, your budget for housing is (80,000 ÷ 12) × 0.36 − 500 = 2,400 − 500 = 1,900 per month. At 6.5% over 30 years, a 1,900 payment supports a loan of about 300,601. Add a 40,000 down payment and you can afford a home priced around 340,601. Notice the 500 in debts costs you roughly 79,000 of borrowing power.

If your existing debts already exceed the DTI ceiling, the calculator shows no affordable amount — you would need to clear debt or raise income first. A higher DTI limit (some loan programs allow 43% or more) increases the price but also your monthly strain. Remember the result is a principal-and-interest budget only: property tax, insurance, and HOA dues come out of the same income, so most buyers should aim below the maximum.