Mortgage Affordability Calculator (How Much House?)

DTI FINANCE HOME BUYING MORTGAGE
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By Checked against sources by , Founder & Architect, RECATOOLS Published Updated Last reviewed

Mortgage affordability calculator. Uses the 28/36 debt-to-income rule from gross income, monthly debts, and down payment. Shows max + recommended-safe home price plus a full PITI breakdown.

RT-FIN-224 · Finance & Money
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Mortgage Affordability Calculator

Income + existing debts
household pre-tax income
car + student + credit-card payments
the traditional 28% rule of thumb
Fannie Mae: 36% manual, up to 45% or 50% (DU)
Loan terms
cash available at closing
30-yr fixed ~6.5-7.5% mid-2026
15, 20, or 30 standard
Other housing costs
US avg ~1.1%; TX/NJ >2%; CA ~0.7%
~0.3-0.5% of home value typical
condos/townhomes typical
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How to use the mortgage affordability calculator

Enter your gross annual household income

Pre-tax income, combined if two of you will be on the loan. Debt-to-income ratios are worked on gross monthly income, as both the CFPB and Fannie Mae define them. Leave out income a lender is unlikely to count, such as a one-off bonus.

Enter your monthly debt payments and the limits

Add the required monthly payments on car loans, student loans, card minimums and other debts. The two limits default to the traditional 28% of gross for housing and 36% for all debts. Fannie Mae caps total debt at 36% for manually underwritten loans, up to 45% with compensating factors and 50% through its automated system, so change them to match the loan you expect.

Enter down payment, mortgage rate, and term

Down payment is the cash you bring to the purchase. For the rate, use a quote from a lender for your own credit profile; the result is sensitive to it, by about 7.5 to 8% of the price per percentage point at the default inputs.

Estimate property tax, insurance, and HOA

Property tax is a percentage of the price a year, from your county or the listing. Insurance is a yearly premium and HOA a monthly fee. All three come out of the same monthly housing budget as the mortgage payment, so they reduce the loan you can carry.

Read the two prices

The first price is the most the two limits allow; it is not a lender approval. The second uses 25% of gross for housing and is still held inside the total-debt limit, so with heavy debts the two can be equal.

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How much house can you actually afford? The 28/36 rule, demystified

"How much house can I afford?" turns the mortgage payment formula around. The calculator starts from a monthly housing budget, the lower of two limits: a share of gross income for housing, and a share for all debts minus the debts you already pay. It then finds the price whose payment, property tax, insurance and HOA fee add up to exactly that budget. Because property tax rises with the price, the price appears on both sides of that equation; the tool solves it directly rather than by trial and error.

What the 28/36 limits are, and are not

The CFPB defines the debt-to-income ratio as all monthly debt payments divided by gross monthly income, and notes that different loan products and lenders set different limits. Fannie Mae's Selling Guide (B3-6-02) caps the total ratio at 36% of stable monthly income for manually underwritten loans, allows up to 45% with the credit score and reserves its eligibility matrix requires, and allows up to 50% for loans run through its automated Desktop Underwriter. It sets no separate housing-only limit. So 28/36 is a conservative rule of thumb, not a lender's rule, and both numbers are editable here.

Two prices, and why the second respects your debts

The second figure uses 25% of gross income for housing, a stricter share, but it is still held to the total-debt limit. An earlier version of this page ignored existing debts for that figure, so a buyer with large car or card payments was shown a "safe" price above the maximum the debt limit allows. On the defaults (USD 100,000 income, USD 500 of monthly debts, 7%, 30 years), the maximum is about USD 332,000 and the 25% price about USD 299,000.

The limit decides the budget; the rate decides what the budget buys. Change either and the price moves.

Rate, fees and insurance all come out of the same budget

The budget is fixed by income, so everything else competes for it. On the defaults, a 1 point lower rate raises the maximum price by about 8% (USD 332,000 at 7%, USD 358,500 at 6%), and a USD 350 monthly HOA fee lowers it by about USD 45,700. With less than 20% down on a conventional loan you may also have to buy private mortgage insurance, which the CFPB notes protects the lender, not you. For a loan on a single-family principal residence closed on or after 29 July 1999, the servicer must cancel it automatically when the balance is scheduled to reach 78% of the original value.

Singapore uses different ratios

In Singapore, MAS sets the limits. The mortgage servicing ratio caps repayments on all property loans at 30% of gross monthly income for an HDB flat, or an executive condominium still inside its minimum occupation period. The total debt servicing ratio caps all debt repayments at 55% of gross monthly income for any property loan. Set the two limits here to 30% and 55% for a rough Singapore HDB view. The Singapore ratios count repayments only, so set the tax, insurance and HOA boxes to 0 for that comparison.

What 28/36, Fannie Mae's 36–50% and Singapore's MSR and TDSR each limit

01

Debt-to-income ratio = all monthly debt payments ÷ gross monthly income (CFPB).

02

Fannie Mae caps total DTI at 36% for manually underwritten loans, up to 45% with compensating factors.

03

Through Fannie Mae's Desktop Underwriter, the maximum DTI is 50%.

04

28/36 is a rule of thumb: Fannie Mae sets no separate housing-only limit.

05

On the defaults, 1 point off the rate raises the maximum price about 8%: USD 332,000 at 7%, USD 358,500 at 6%.

06

A USD 350 HOA fee lowers the maximum price on the defaults by about USD 45,700.

07

Private mortgage insurance can be required on a conventional loan with less than 20% down; it protects the lender.

08

PMI must end automatically when the balance is scheduled to reach 78% of the original value (loans from 29 July 1999).

09

Singapore's MSR caps property-loan repayments at 30% of gross monthly income for HDB flats.

10

Singapore's TDSR caps all debt repayments at 55% of gross monthly income for property loans.

Frequently asked questions

  • Because the ratios are defined that way: the CFPB and Fannie Mae both divide debt payments by gross monthly income. That makes borrowers comparable, but it is not what you live on. Before committing, check the payment against your take-home pay as well.

  • The maximum is only what these limits allow; it says nothing about the rest of your budget. The 25% figure leaves more room and is still held inside the total-debt limit. Which suits you depends on your savings, job security and other goals, so compare the payment with your take-home budget rather than with either rule.

  • It applies whatever two limits you enter, so you can approximate any programme by typing its ratios. Government-backed loans set their own rules, including different mortgage-insurance premiums and, for VA loans, a residual-income test this calculator does not model. Check the programme's own guidance or a lender before relying on the result.

  • It does three things here. It is added straight to the price you can afford, because the budget only has to carry the loan. It decides whether a conventional loan may need private mortgage insurance, which the CFPB says can be required below 20% down. And it is your cushion if prices fall after you buy.

  • This calculator covers the ongoing monthly cost only. Closing costs are paid once, at purchase, and vary with the lender, the location and the loan. Use the closing cost calculator for an estimate, and compare the Loan Estimates lenders give you, which the CFPB recommends doing for the same kind of loan from different lenders.

  • Yes, though less than rules of thumb often say, because tax, insurance and the down payment do not change with the rate. On this page's defaults the maximum price is about USD 464,000 at 3%, USD 359,000 at 6%, USD 332,000 at 7% and USD 309,000 at 8%: roughly 7.5 to 8% per point near today's rates, and about 28% between 3% and 7%.

  • It comes out of the same monthly housing budget as the mortgage payment, so every dollar of HOA is a dollar less for principal and interest. On the defaults, a USD 350 monthly fee lowers the maximum price by about USD 45,700.

  • That is a judgement about your own finances, not a ratio. Before going to the top of the limits, check the payment against take-home pay, keep an emergency reserve after the down payment and closing costs, and run the calculator again at a rate one point higher to see what a refinance at a worse rate, or an adjustable loan resetting, would cost.

  • No. Income, debt, down payment, rate — every input stays in your browser as client-side JavaScript. The calculation runs entirely on your machine: max PITI from 28/36, iterative property-tax adjustment, mortgage payment inversion. Open DevTools → Network when you click Calculate and you'll see zero outbound requests. Safe for confidential financial planning.

  • Fannie Mae's Selling Guide, section B3-6-02, sets out its debt-to-income limits. The CFPB's owning-a-home pages explain debt-to-income ratios, Loan Estimates and private mortgage insurance in plain language. In Singapore, MAS publishes the MSR and TDSR rules on its new-housing-loans pages.

Method & sources

How it computes

Housing budget = min(front x gross monthly income, back x gross - other debts), limits editable (default 28/36). Price solves P&I + property tax + insurance + HOA = budget exactly: price = (A(budget - ins - hoa) + down) / (1 + A x tax/12), A the annuity factor. The 25% price is held to the back-end limit too. RecaProperty.affordability, tested.

What this tool implements

  • Bug fixed: the '25% safe price' ignored existing debts, so with large car or card payments it came out ABOVE the maximum the 36% back-end limit allows. It is now the lower of 25% of gross and the back-end budget. The eight-round iteration is replaced by an exact closed form (agrees to within $1).
  • 28/36 is a rule of thumb, not a lender rule: Fannie Mae B3-6-02 caps total DTI at 36% (manual), 45% with compensating factors, 50% (DU), with no housing-only limit; both limits are now inputs. The page said 1 point of rate moves affordability 10-12%; on its defaults it is ~8% ($332,024 at 7%, $358,531 at 6%). Error messages named the wrong cause.
  • PMI wording follows the CFPB (may be required below 20% down; protects the lender; automatic termination at 78% for loans closed from 29 Jul 1999). Singapore MSR 30% / TDSR 55% from MAS. Removed as unsourced: PMI cost ranges, FHA/VA/USDA ratios, state property-tax figures, rate forecasts and income take-home examples.

Sources

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