Mortgage Affordability Calculator
Calculate the maximum home price you can afford based on your gross income, monthly debts, and down payment — using standard front-end and back-end DTI guidelines.
Income & Debts
Loan Details
Taxes & Insurance
How to Use
- 1Enter your annual gross income and all existing monthly debt payments — include car loans, student loans, and minimum credit card payments, but NOT your current rent payment.
- 2Enter your available down payment, expected interest rate, and loan term — the calculator uses both the 28% front-end and 43% back-end DTI rules to find your limit.
- 3Enter your local property tax rate as a percentage of home value (average is 1.1% nationally) and your estimated annual insurance premium.
- 4The recommended maximum is the lower of the two DTI-based limits — this is the most conservative and lender-approved ceiling for your home purchase budget.
Example Calculation
Inputs
Annual Income: $90,000 ($7,500/month) | Monthly Debts: $500 | Down Payment: $30,000 | Rate: 7.0% | Term: 30 yrs | Front-End: 28% | Back-End: 43% | Tax Rate: 1.2% | Insurance: $1,200/yr | HOA: $0
Front-End Limit (28%)
Back-End Limit (43%)
RECOMMENDED MAXIMUM (conservative)
Income Breakdown
"The 28% front-end DTI is the binding constraint here because $500 in existing debts leaves ample room under the 43% back-end limit. To increase affordability, consider a larger down payment, lower debts, or a longer loan term."
Frequently Asked Questions
Q1: What is the 28/36 rule for mortgage affordability?
A1: The 28/36 rule is a traditional lender guideline stating that housing costs should not exceed 28% of gross monthly income (front-end DTI), and total monthly debt payments should not exceed 36% (back-end DTI). On a $7,500 monthly income, this limits housing to $2,100 and total debt to $2,700. Many modern lenders use a 43% back-end limit (as used in this calculator), which is the standard for FHA and conventional loan qualification.
Q2: What counts as monthly debt for the back-end DTI?
A2: Monthly debts include minimum credit card payments, car loan payments, student loan payments, personal loan payments, and any other recurring debt obligations. Your current rent does NOT count as it will be replaced by the mortgage. Child support and alimony are also counted by lenders. The key principle is to include only debts that will continue after you purchase the home.
Q3: How does down payment affect affordability?
A3: A larger down payment directly increases your maximum home price in two ways. First, it reduces the loan amount, which lowers the monthly P&I payment, leaving more room under the DTI ceiling for a more expensive home. Second, a down payment of 20% or more eliminates PMI, reducing monthly housing costs further. On a $90,000 income, every $10,000 increase in down payment allows roughly $13,000 more in home price at 7.0%.
Q4: What is the difference between front-end and back-end DTI?
A4: Front-end DTI measures only your housing costs (P&I + tax + insurance + HOA) as a percentage of gross income — typically capped at 28%. Back-end DTI includes ALL monthly debts (housing + car + student loans + credit cards) as a percentage of gross income — typically capped at 36-43%. If you have significant other debts, the back-end limit will be the binding constraint. If you have little other debt, the front-end limit binds first.
Q5: Can I afford more house than this calculator shows?
A5: These limits are based on standard lender guidelines, not absolute maximums. Some loan programs allow higher DTI ratios — FHA loans may approve up to 50% back-end DTI with strong compensating factors such as a large down payment or excellent credit. VA loans also have more flexible DTI limits. However, qualifying for a larger mortgage does not necessarily mean you can comfortably afford the payments — it is generally wise to stay at or below the 28% front-end guideline for long-term financial comfort.
This calculator provides estimates for informational purposes only. Actual mortgage approval depends on your specific credit score, employment history, and lender-specific guidelines. Consult a licensed mortgage professional before making financial decisions.