# House Affordability Calculator

> Estimate the home price you can afford from your income, debts, down payment and mortgage rate using housing and total-debt ratio limits you can adjust.

Category: Real estate · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/house-affordability-calculator

Lenders cap housing costs and total debt payments at a share of gross income, often around 28% and 36%. Working backwards from those limits gives the largest loan, and so the price, you can afford.

Also called: Home affordability calculator, How much house can I afford calculator.

## Inputs
- Gross annual income (default 120000)
- Monthly debt payments (default 500; optional)
- Down payment (default 60000; optional)
- Mortgage rate (unit %; default 6.5)
- Loan term (options: 10 years, 15 years, 20 years, 25 years, 30 years; default 30)
- Property tax (unit % of value a year; default 1.1; optional)
- Home insurance (per year) (default 1500; optional)
- HOA or service charges (per month) (default 0; optional)
- Housing cost limit (unit % of income; default 28)
- Total debt limit (unit % of income; default 36)
- Currency

## Results
- Home price you can afford
- Mortgage amount
- Monthly housing cost
- Principal and interest
- Property tax per month
- Limit that applies

## Formula

```
H = min(Front% × Income/12, Back% × Income/12 − Debts);  Loan = (H − Down × t/12 − Insurance/12 − HOA) ÷ (k + t/12);  Price = Loan + Down
```

Where:
- H: maximum monthly housing cost
- k: monthly payment per unit borrowed, i(1+i)^n ÷ ((1+i)^n − 1)
- t: property tax rate per year

## Worked example
1. Monthly income = 10,000. Housing limit 28% = $2,800; debt limit 36% − 500 = $3,100. The lower, $2,800, applies.
2. At 6.5% over 30 years, k = 0.0063207 per unit borrowed; tax is 1.1% ÷ 12 of the price; insurance $125 a month.
3. Loan = (2,800 − 60,000 × 0.011/12 − 125) ÷ (0.0063207 + 0.011/12) = $362,011.11; price = $422,011.11.
4. Check: 2,288.16 P&I + 386.84 tax + 125 insurance = $2,800.

**Result:** On $120,000 a year with $500 of monthly debts and $60,000 down, the 28/36 guideline points to a home of about $422,000.

## What the result means

This is the most the ratios allow, not a comfortable budget. Leave room for maintenance, savings and rate rises, and remember that closing costs and mortgage insurance (with a small down payment) add to the cost.

## Assumptions and limits
- Fixed-rate mortgage with monthly payments.
- The 28% and 36% limits are common guidelines you can change; they are not legal limits.
- Property tax is a percentage of the purchase price.
- Mortgage insurance, closing costs and lender-specific credit rules are not included.
- Income is gross (before tax), as lenders usually use.

## Questions

### What is the 28/36 rule?

A widely used guideline: housing costs should not exceed 28% of gross monthly income, and all debt payments including housing should not exceed 36%.

### How can I afford more?

Pay down other debts, save a larger down payment or find a lower rate. Reducing a $500 car payment raises the budget only if the debt limit is the one that applies.

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_This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ._

Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/house-affordability-calculator