House Affordability Calculator
Estimate your safe and maximum home purchase budget based on household salary and liquid cash savings. Designed to protect buyers from becoming house-poor, this tool automatically reserves an emergency safety fund while modeling realistic 30-year fixed mortgage underwriting requirements.
Total verifiable gross household earnings before taxes
Car loans, credit cards, and student loan recurring monthly dues
Total cash available (a $10,000 emergency/closing buffer is automatically reserved)
Anticipated 30-year fixed mortgage interest rate
Maximum target property purchase price supported by income and down payment
How to Use This Calculator
- Enter your annual household gross income.
- Enter non-housing monthly debt repayments (auto, student, credit cards).
- Input total available liquid cash savings in bank or money market accounts.
- Review the realistic house purchase price and safe monthly housing budget.
Formula & Calculation Methodology
Calculates available down payment capital by reserving a $10,000 emergency liquidity cushion from liquid assets. It then computes allowable mortgage principal through the 28/36 debt-to-income underwriting standard.
Worked Example
$95,000 income, $500/mo debt, $60,000 savings, 6.5% interest rate over 30 years
Frequently Asked Questions
Why does the calculator reserve a $10,000 cash buffer?↓
Purchasing a home requires 2% to 4% in non-down payment closing fees, plus moving expenses and unexpected first-month home repairs. Preserving a cash cushion prevents dangerous post-closing liquidity shortages.
What is the "3x to 4x income" rule of thumb?↓
Historically, buyers were advised that home prices should equal approximately 3 to 4 times annual household income. While a helpful starting rule, actual capacity depends heavily on mortgage interest rates and existing debt.
Can I buy a home with less than 20% down?↓
Yes. Conventional loans allow down payments as low as 3% to 5%, and FHA loans require 3.5%. However, down payments under 20% require monthly private mortgage insurance (PMI).
What limitation applies if my credit score is below 680?↓
This calculator assumes prime conforming mortgage interest rates. Borrowers with credit scores below 680 may face higher interest rate margins (0.5% to 1.5% higher) and increased loan fees.
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Open calculator →Source Citation & Disclaimer
Informational tool only; not licensed tax, legal, or financial advice.