Home Affordability Calculator
Estimate the maximum home purchase price and monthly PITI + HOA housing budget that fits your annual gross income, monthly debt obligations, down payment, and target DTI ratio.
Income, Debt & Financing Assumptions
Max Loan: $330,940.00 + $60,000.00 Down Payment
DTI-Constrained Maximum Housing Payment & Loan Capacity
Max PITI+HOA = min(Gross Monthly Income ร Front-End DTI, Gross Monthly Income ร Back-End DTI โ Monthly Debts)- Gross Monthly Income = Annual Gross Income รท 12.
- Binding Max Housing Budget = The lower of your Front-End Housing Ratio cap and your Back-End Total DTI cap (after subtracting existing monthly debts).
- Max Principal & Interest (P&I) = Binding Max Housing Budget โ Monthly Property Taxes โ Monthly Insurance โ Monthly HOA.
- Affordable Home Price = Max Supported Mortgage Principal + Available Down Payment.
Step-by-Step Worked Example
Calculation Steps:
- Front-End Cap (28%) = $10,000 ร 0.28 = $2,800/mo; Back-End Cap (36%) = ($10,000 ร 0.36) โ $450 = $3,150/mo
- Binding Max PITI Budget = $2,800/mo โ Max P&I Budget = $2,800 โ $500 = $2,300/mo
- Max Loan Principal at 6.5% for 30 yrs = $363,885 โ Estimated Affordable Home Price = $363,885 + $60,000 = $423,885
How to Use This Calculator
- 1Enter your annual before-tax household gross income and recurring monthly debt payments (auto loans, student loans, minimum credit card payments).
- 2Enter your available cash down payment, expected mortgage interest rate, and loan term.
- 3Provide monthly estimates for property taxes, homeowners insurance, and HOA dues.
- 4Adjust the front-end and back-end DTI percentage caps to match your personal comfort level or loan program.
Assumptions & Limitations
- Results are for educational planning only and do not represent a mortgage pre-approval or lender underwriting commitment.
- Lenders evaluate credit scores, cash reserves, employment history, and property-specific taxes in addition to DTI ratios.
- Property tax and insurance inputs are treated as fixed monthly amounts; adjust them if exploring significantly higher or lower price points.
Frequently Asked Questions
What is the 28/36 rule in home affordability?
The 28/36 rule is a traditional mortgage guideline stating that your total monthly housing payment (PITI + HOA) should not exceed 28% of your gross monthly income (front-end DTI), and your total debt payments (housing plus auto, student, and credit card debt) should not exceed 36% of gross income (back-end DTI).
Does this calculation guarantee mortgage lender approval?
No. This calculator provides an mathematical estimate based on your entered DTI ratios. Actual lender approval depends on credit scores, employment verification, loan program rules (Conventional, FHA, VA), and appraisal results.
Which debts are included in monthly debt payments?
Include recurring credit obligations reported on your credit report: minimum credit card payments, auto loans, student loans, personal loans, and alimony/child support. Do not include utilities, groceries, or health insurance.
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