Home Affordability Calculator
Find the maximum home price you can afford, based on your income, existing debt, down payment, and target debt-to-income ratio.
How the calculation works
Starts from your target debt-to-income ratio: your total monthly debt, including a new mortgage payment, shouldn't exceed that percent of your gross monthly income. Subtracting your other existing debt payments from that budget leaves the maximum you can put toward housing each month. Because property tax is itself a percent of the home price you're solving for, there's no single-step formula for the maximum price, so this searches for the home price whose total monthly payment (principal, interest, property tax, insurance, and HOA together) exactly uses up that housing budget.
Formula
Max Housing Payment = Gross Monthly Income × Target DTI − Other Monthly Debt. Max Home Price is solved so that Principal & Interest + Property Tax + Insurance + HOA on that price equals the Max Housing Payment.
Examples
$90,000 income, $400 other debt, $40,000 down, 6.5% rate, 30-year term, 36% DTI
$332,003.87 max home price ($292,003.87 loan, $2,300.00/month total payment)
$150,000 income, $800 other debt, $80,000 down, 7% rate, 30-year term, $250/month HOA, 43% DTI
$595,578.73 max home price ($515,578.73 loan, $4,575.00/month total payment)