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House Affordability Calculator - How Much House Can You Afford?

Determine your home buying budget based on your income, debts, and down payment. Learn about debt-to-income (DTI) ratios and how to plan for a sustainable mortgage.

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House Affordability Calculator: Setting a Realistic Buying Budget

Before you start touring homes, the most important question to answer is: "How much can I actually afford?" Buying a home that stretched your budget too thin is a recipe for financial stress. This House Affordability Calculator uses the same Debt-to-Income (DTI) standards as major lenders to help you find your "Comfort Zone" and your "Maximum Limit."

1. The 28/36 Rule of Affordability

Lenders typically use two primary ratios to determine your eligibility:

  • Front-End Ratio (28%): Your monthly housing costs (principal, interest, taxes, insurance) should not exceed 28% of your gross monthly income.
  • Back-End Ratio (36%): Your total monthly debt payments (including the new mortgage, car loans, and credit cards) should not exceed 36% of your gross monthly income.

Use our Mortgage Calculator to see how different interest rates affect these ratios.

2. Factors That Influence Your Buying Power

  • Down Payment: The more cash you bring to the table, the lower your monthly payment and the more house you can afford.
  • Interest Rates: Even a 0.5% difference in rates can change your buying power by tens of thousands of dollars. Check our APR Calculator for true costs.
  • Existing Debt: High car payments or student loans will lower your affordable home price because they consume your Back-End DTI.

3. Renting vs. Buying

If your affordability results are lower than the home prices in your area, you might want to use our Rent vs Buy Calculator to see if waiting and saving for a larger down payment is a smarter long-term move.

4. FAQ

Q: Should I buy at my "Maximum" limit? A: Generally, no. Lenders calculate what you can pay, but they don't account for your lifestyle, travel, or savings goals. Aiming for the "Comfortable" range is usually wiser.

Q: Does my credit score affect affordability? A: Yes. A higher score earns a lower interest rate, which directly increases the amount of principal you can borrow for the same monthly payment.

Conclusion

Finding the right home starts with finding the right number. Use this calculator to set your search parameters with confidence. Start by entering your income and debt details above.