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Free home affordability calculator

Lenders use two rules to limit housing costs. This calculator applies the 28% front-end and 43% back-end DTI limits and solves for the maximum home price that keeps you within.

About this calculator

How to use

  1. Enter your gross annual income (before taxes).
  2. Add up all monthly non-housing debt payments and enter the total.
  3. Enter your planned down payment amount.
  4. Set the interest rate, loan term, property tax rate, annual insurance, and HOA fees.
  5. Click Calculate affordability to see your maximum home price and DTI ratios.

The formula

Front-end limit: Monthly PITI ≤ 28% × (Annual income ÷ 12)

Back-end limit: Monthly PITI ≤ (43% × monthly income) − monthly debts

Binding constraint: Max PITI = min(front-end limit, back-end limit)

Solving for home price from max PITI:

H = (maxPITI − insurance/12 − HOA + downPayment × A) / (A + taxRate/1200)

Where A = monthly mortgage factor = r(1+r)^n / ((1+r)^n − 1) and r is the monthly rate.

Worked example

$100,000 annual income, $500 monthly debts, $60,000 down payment, 7% rate, 30 years, 1.2% tax, $2,400 insurance.

  • Monthly income: $8,333
  • Front-end limit: $8,333 × 28% = $2,333/mo PITI
  • Back-end limit: $8,333 × 43% − $500 = $3,083/mo PITI
  • Binding constraint: $2,333/mo (front-end)
  • Maximum home price: approximately $274,000–$300,000 (varies by tax/insurance)

Notes

  • The 43% back-end DTI is a conventional guideline. FHA loans may allow up to 50% with compensating factors. Jumbo loans may require 36–38%.
  • This calculator uses 2024 conventional lending standards. Your lender may apply different thresholds based on credit score, down payment, and loan type.
  • The result does not account for PMI, which lenders typically require when the down payment is below 20%.

Frequently asked

What is the 28/43 rule?
The 28% rule says your monthly housing payment (principal, interest, taxes, and insurance) should not exceed 28% of gross monthly income. The 43% rule says all monthly debts combined — housing plus car loans, student loans, and other payments — should not exceed 43% of gross income.
Why is my max price lower than I expected?
Common reasons: high existing debts eat into your 43% limit, the interest rate is high (raising the payment per dollar borrowed), or property taxes and insurance in your area are above the defaults. Try adjusting the inputs to match your real situation.
Does this calculator include PMI?
No. Private mortgage insurance typically applies when the down payment is less than 20% of the home price: roughly 0.5–1.5% of the loan per year. Add that to the insurance field as a rough estimate if your down payment is under 20%.
What counts as monthly debts?
Include all recurring debt payments reported on your credit report — car loans, student loans, minimum credit card payments, personal loans, and child support. Do not include utilities, subscriptions, or groceries.

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