Calculate how much house you can afford based on your income, debts, down payment, and mortgage terms.
Enter your details and click Calculate to see results.
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Input your gross annual income before taxes. This is the primary factor in determining your home buying power.
Enter any existing monthly debt payments such as car loans, student loans, or credit card minimums.
Enter your planned down payment, interest rate, loan term, property tax rate, and estimated insurance cost.
See your maximum home price, loan amount, monthly PITI payment, and DTI ratios to understand your buying power.
This calculator uses the 28% front-end debt-to-income (DTI) guideline, one of the most widely used rules of thumb in mortgage lending. It states that your total monthly housing costs (principal, interest, property taxes, and homeowners insurance, collectively known as PITI) should not exceed 28% of your gross monthly income. For example, a household earning $100,000 annually ($8,333/month) would have a maximum PITI budget of $2,333/month. This guideline helps ensure you can comfortably cover housing costs while still having income available for other expenses, savings, and emergencies.
The calculator works backward from your maximum PITI budget to find the highest home price you can afford. First, it subtracts your monthly insurance cost and estimated monthly property taxes from the maximum PITI amount. The remainder is available for principal and interest (P&I). Because property taxes depend on the home price (which is what we are solving for), the calculator uses an algebraic approach to solve for the loan amount and home price simultaneously. The standard mortgage amortization formula is then reversed to convert the available P&I payment into a maximum loan amount. Adding your down payment to that loan amount gives the maximum home price.
The standard guideline is that your total housing costs (mortgage payment, property taxes, insurance, PMI, and HOA) should not exceed 28% of your gross monthly income, and your total debt payments should not exceed 36% of gross income: this is the 28/36 rule. As a rough starting point, most people can afford a home priced at 3-4 times their annual gross income with moderate debt, decent credit, and at least a 5% down payment. On a $75,000 salary with minimal debt, that translates to approximately $225,000-$300,000 depending on your down payment, interest rate, and local property tax rates. However, this range varies substantially based on your specific situation: existing debts reduce your buying power (every $100/month in debt reduces your affordable home price by approximately $15,000-$18,000), a larger down payment increases it, and local costs like property taxes can shift the number by 10-15% in either direction. Use our calculator above for a precise answer based on your complete financial picture.
