About the Mortgage Affordability Calculator
This mortgage affordability calculator estimates the maximum home price you could reasonably afford, based on your gross income, existing monthly debts and down payment, using the 28/36 rule that underpins how many lenders assess affordability. Rather than asking you to guess a loan amount, it works backwards from what your income can support to a realistic home price, including an estimate for property tax and insurance on top of the loan payment itself.
How to use the Mortgage Affordability Calculator
- 1
Enter your gross annual income, before tax.
- 2
Enter your existing monthly debt payments — car loans, student loans, minimum credit card payments.
- 3
Enter your planned down payment, expected interest rate and loan term.
- 4
Read the maximum home price and loan amount, along with which of the two 28/36 limits ended up capping the result.
What people use it for
Setting a realistic house-hunting budget
Get a ballpark price range before viewing homes, so time isn't spent looking above what your income can realistically support.
Seeing the effect of paying down other debt first
Reduce the existing monthly debts figure to see how much more home price that debt was costing you against the 36% total debt limit.
Comparing a larger down payment against a higher price
Increase the down payment figure to see directly how much additional home price it buys, holding the same monthly budget.
The 28/36 rule explained
Housing costs — the loan payment plus property tax and insurance — are capped at 28% of gross monthly income under the front-end ratio. Total debt payments, meaning housing costs plus every other monthly debt obligation, are capped at 36% under the back-end ratio. Whichever of the two produces the smaller allowable housing payment is the one that actually limits the result, which is why someone with significant existing debt often finds the 36% back-end limit binding well before the 28% housing-only limit would.
Why the calculation solves for loan amount, not the other way round
The maximum monthly housing payment you can afford has to cover both the loan's principal-and-interest payment and an estimate of property tax and insurance, and that tax and insurance estimate itself scales with the home's price — which is exactly the number being solved for. This creates a small circular relationship: a higher home price means a higher loan, a higher payment, and higher tax and insurance, all at once. The calculator solves this directly with algebra rather than guessing a rough split between the two, so the result is consistent regardless of how large the down payment or the tax rate happens to be.
Tips
- A larger down payment increases affordability in two ways at once: it directly reduces the loan needed, and it lowers monthly tax and insurance since those scale with the total home price, not just the loan.
- Paying off a car loan or credit card balance before applying can raise the 36% limit meaningfully, sometimes more than saving a slightly larger down payment would.
- This is a planning estimate, not a lender's decision — get pre-qualified with an actual lender before making an offer on a home.