Home Affordability Calculator

Most mortgage calculators answer one question: given a home price, what's the payment? This tool flips that around. It starts with what a lender actually cares about, how much of your gross income can safely go toward housing and total debt, and solves backward to the highest home price that fits inside both limits.

The Two Ratios Lenders Actually Use

The front-end ratio caps your housing payment (principal, interest, taxes, and insurance) at a percentage of gross monthly income, commonly 28%. The back-end ratio caps your total monthly debt, housing payment plus car loans, student loans, credit cards, and anything else on your credit report, at a higher percentage, commonly 36%, though many conventional and government-backed programs stretch this to 43-45% for otherwise strong borrowers. This calculator computes the maximum housing payment allowed under each ratio separately, then uses whichever number is smaller, because that's the one a real underwriter would apply.

From Maximum Payment to Maximum Price

Once the maximum monthly housing payment is known, the calculator has to work backward through principal-and-interest, property tax, and insurance simultaneously, since property tax and insurance both scale with price while principal-and-interest scales with the loan amount (price minus down payment). Algebraically solving that relationship for price is what produces the final number, rather than guessing and checking.

Worked Example

$90,000 annual income, $400/month in existing debts, $40,000 down payment, 6.5% rate, 30-year term, 1.1% property tax, $1,500/year insurance, 28% front-end / 36% back-end limits:

• Gross monthly income: $90,000 ÷ 12 = $7,500
• Front-end limit: $7,500 × 28% = $2,100
• Back-end limit: ($7,500 × 36%) − $400 = $2,300
• Binding constraint: front-end, since $2,100 < $2,300 → max housing payment = $2,100
• Payment factor at 6.5%/30-yr: approximately 0.0063208 per dollar borrowed
• Solving the price equation: Max Home Price ≈ $307,800
• Loan amount: ≈ $267,800 · Monthly P&I: ≈ $1,693 · Property tax: ≈ $282/mo · Insurance: ≈ $125/mo · Total PITI: ≈ $2,100
• Resulting ratios: front-end 28.0% (at the limit, as expected) · back-end 33.3% (comfortably under the 36% cap)

Qualifying for a Price Isn't the Same as It Being the Right Price

This is worth saying plainly: lenders' ratio guidelines describe what they're willing to lend, not what fits your actual financial plan. Two households approved for the same $400,000 mortgage can have very different amounts of breathing room left over depending on savings goals, income stability, and other priorities. Treat this calculator's output as a ceiling to know about, not a target to hit.

If you already have a specific price in mind and want to see the payment it produces, run it through the Mortgage Payment Calculator. And if your back-end ratio is what's limiting you here, the Debt-to-Income Calculator can help you see exactly which debts are eating into that room and by how much.

Further reading: Consumer Financial Protection Bureau — Preparing to Buy a Home and Wikipedia — Debt-to-Income Ratio.