Mortgage Affordability Calculator
Discover your true home buying power before starting your house hunt. Using the gold-standard 28/36 debt-to-income (DTI) mortgage qualifying guidelines, this calculator determines the maximum home purchase price and loan balance lenders will approve based on your verifiable income.
Combined yearly household earnings before taxes
Minimum payments on auto loans, credit cards, and student loans
Total cash reserved specifically for property down payment
Prevailing 30-year fixed conforming mortgage rate
Duration of loan amortization schedule
Total maximum purchase price including your down payment
How to Use This Calculator
- Enter your annual household gross earnings before taxes.
- Enter existing monthly recurring debts (auto, student loan, and minimum credit card dues).
- Enter your saved cash down payment.
- Select your loan term and anticipated interest rate.
- Review the maximum approved home price and qualifying monthly payment.
Formula & Calculation Methodology
Lenders evaluate two debt-to-income benchmarks: the front-end ratio (housing costs ≤ 28% of gross monthly income) and the back-end ratio (total debts ≤ 36% of gross income). The lower of the two governs the maximum allowable loan principal.
Worked Example
$110,000 household income with $750/mo debt and $60,000 down payment at 6.5% interest
Frequently Asked Questions
What is the 28/36 rule and who enforces it?↓
The 28/36 rule is the classic underwriting benchmark used by Fannie Mae, Freddie Mac, and conventional lenders. It mandates that no more than 28% of your gross monthly income go toward housing, and no more than 36% toward all debts combined.
Can borrowers with FHA or VA loans exceed 36% DTI?↓
Yes. Government-backed loan programs like FHA frequently permit back-end DTI ratios up to 43% to 50% for borrowers with strong credit scores and automated underwriting system (AUS) approval.
How does a larger down payment impact affordability?↓
Every dollar added to your down payment directly increases your purchase price 1-to-1. In addition, reaching 20% down eliminates monthly private mortgage insurance (PMI), freeing up monthly payment capacity for a larger loan.
What limitation exists if mortgage rates change during home shopping?↓
Because monthly payment capacity is fixed by your income, every 1% increase in mortgage rates reduces your maximum borrowing power by approximately 10% to 11%.
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Open calculator →Source Citation & Disclaimer
Informational tool only; not licensed tax, legal, or financial advice.