Home Affordability Calculator — How Much House?

How this calculator works

Affordability is driven by two debt-to-income ratios. The front-end ratio is your housing payment divided by gross monthly income; the back-end ratio adds every other debt payment. Lenders look at both, and whichever binds first is your real limit.

The comfortable figure uses 28% front-end and 36% back-end — the long-standing conservative guideline, which leaves room for saving, maintenance and a change of circumstances. The lender maximum uses 36% and 43% by default. 43% is FHA’s standard limit on total debt for a manually underwritten loan; conventional loans can go further, to 45% with strong credit and reserves or 50% through Fannie Mae’s automated underwriting, and FHA’s own limit on housing alone is 31%. Change the limits to match the loan you are considering — the debt-to-income calculator shows where you stand against each.

Turning an affordable payment into an affordable price is circular: property tax, insurance and PMI all depend on the price you are solving for. Rather than compute a loan amount from principal and interest alone and bolt the rest on afterward — which overstates affordability, sometimes badly — this finds the largest price whose *complete* monthly cost fits the budget, to within a dollar.

The gap between the two prices is the point of the tool. Being approved for the higher number is not the same as it being a good idea.

The formula

Exactly what happens to your numbers, step by step.

The two ratios

front-end DTI = housing payment ÷ gross monthly income
back-end DTI  = (housing payment + other debts) ÷ gross monthly income

Monthly housing budget

budget = min(income × front-end limit,
             income × back-end limit − existing debts)

Full monthly cost of a given price

cost = P&I on (price − down payment)
     + price × property tax rate ÷ 12
     + insurance ÷ 12
     + HOA
     + PMI if loan-to-value > 80%

Affordable price
```
the largest price for which cost(price) ≤ budget
```
Solved numerically, because cost depends on price and price depends on cost.

A worked example

$100,000 household income, $500 a month in car and student loan payments, $60,000 saved, at a 6.5% rate over 30 years.

What you enter

Annual income: $100,000
Monthly debts: $500
Down payment: $60,000
Interest rate: 6.5%
Property tax: 1.1% a year

Step by step

Gross monthly income: $8,333
Comfortable housing budget (28%): $2,333
Back-end check (36% − $500): $2,500
Binding limit: $2,333 — the front-end ratio
Maximum housing budget (36%): $3,000
Back-end check (43% − $500): $3,083

Comfortable: about $340,000 · Lender maximum: about $425,000

The difference is about $87,000 of house — and about $670 a month. That $670 is what you would be giving up in savings, vacations and slack in the budget.

Assumptions

Every result here rests on these. Change your inputs and the result changes with them.

Income is gross, before tax, for everyone who will be on the loan.
Monthly debts are the minimum payments lenders count: car loans, student loans, credit card minimums, child support. Rent and utilities are excluded because they disappear when you buy.
PMI is included whenever the down payment is under 20%, and drops off when the balance reaches 80% of the purchase price.
Property tax and insurance are held flat in nominal terms; in reality both tend to rise.
A 30-year fixed rate loan is assumed unless you change the term.

What this cannot tell you

This is a budgeting estimate, not a pre-approval. Lenders also weigh credit score, employment history, reserves and the property itself.
It says nothing about closing costs, which typically run 2%–5% of the price and are paid on top of the down payment.
Maintenance is not modeled. A common rule of thumb is 1% of the home’s value a year.

Questions people ask

What percentage of income should go to a mortgage?

The traditional guidance is no more than 28% of gross income on housing and 36% on all debt combined. Those figures are conservative by design — they are what leaves room to save and absorb a surprise.

Why is the lender maximum so much higher?

Because a lender is answering a different question. They are assessing the risk that you stop paying, not whether you will enjoy your life. A 43% debt-to-income ratio can be repaid and still leave very little slack.

How much do my other debts really matter?

A great deal. Every $100 a month of debt payment removes roughly $15,000–$18,000 of buying power at current rates. Paying off a car loan before applying often does more for affordability than saving another few thousand for the deposit.

Should I buy at the top of what I can afford?

Rarely. Property tax rises, insurance rises, and roofs fail. The comfortable figure exists because a mortgage payment is a thirty-year commitment made with today’s information.

Sources and review

Sources

Methodology version 1.0.0 · Last reviewed October 6, 2026

Cite this calculator

For coursework, a resource list or your own site. How every calculator is built and checked is set out on the methodology page.

Citation

Chalk Calculator. (2026, October 6). Home Affordability Calculator (Methodology version 1.0.0). https://chalkcalculator.com/home-affordability-calculator/

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