Home Affordability Calculator
The Home Affordability Calculator tells you the maximum home price you can realistically afford based on your gross income, monthly debts, and available down payment. It applies the lending standards actually used by US mortgage lenders (the 28/36 debt-to-income rule) and UK lenders (the 4–4.5× income multiple) — so you get a realistic number, not just a wish.
Educational estimate. Calculator results are for planning and information only, not financial, tax, medical, legal, or engineering advice. Verify important decisions with official sources or a qualified professional.
Home Affordability Calculator
How Much House Can You Afford?
📐 Formula & Method
US: 28% Front-End DTI Rule
Lenders typically allow your monthly housing costs (principal + interest + taxes + insurance = PITI) to be no more than 28% of gross monthly income.
US: 36% Back-End DTI Rule
Total monthly debt (housing + all other debts) should not exceed 36% of gross monthly income. Some lenders allow up to 43–50% DTI for qualified borrowers.
Max Loan → Max Home Price
Once the maximum monthly payment is calculated, the standard mortgage formula is used in reverse to find the maximum affordable loan, then down payment is added.
📋 How to Use
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1
Enter your annual gross income (before taxes). Include joint income for couples.
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2
Enter your total monthly debt payments — car loans, student loans, credit card minimums.
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3
Enter your available down payment.
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4
Enter the current mortgage interest rate.
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5
Select your desired loan term (30 years is most common).
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6
Click Calculate to see your maximum affordable home price and recommended budget.
💡 Key Insights
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Lenders look at two ratios, not one. Pass the front-end (housing ≤ 28% of gross income) but fail the back-end (total debt ≤ 36%) and your offer shrinks dramatically.
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In the UK the 4.5× income multiple is a hard ceiling for most high-street lenders, regardless of how affordable the monthly payment looks.
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A larger down payment doesn't expand the maximum mortgage — but it directly increases the maximum home price you can target.
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Lenders count student loans, car payments, alimony, and minimum credit-card payments as monthly debts. They do NOT count utilities, food, or insurance.
🧮 Worked Examples
US $90k earner, $300/mo debts
Annual income $90,000, monthly debts $300, $40,000 down, 6.75% rate, 30 years.
UK £55k earner
Annual income £55,000, £30,000 deposit, applying the 4.5× rule.
📊 How to Interpret Your Result
Your back-end DTI < 28%
Comfortable — you have room for a larger home or to overpay on principal.
Back-end DTI 28–36%
On the edge of lender appetite. Most prime lenders will still approve but expect tougher scrutiny.
Back-end DTI > 43%
Above the QM (Qualified Mortgage) ceiling. Pay down debts or buy a smaller home.
⚠️ Common Mistakes to Avoid
Using net (after-tax) income instead of gross.
Fix: All DTI ratios use GROSS (pre-tax) income. Use the figure on your W-2 or P60.
Forgetting closing costs, stamp duty, and moving costs.
Fix: Reserve 3–6% of home price (US) or 3–5% (UK incl. SDLT and conveyancing) on top of the deposit.
Stretching to the maximum the lender will offer.
Fix: The maximum is a ceiling, not a target. Most planners suggest keeping housing under 25% of gross income to allow for retirement, savings, and emergencies.
🎯 Who This Calculator Is For
Pre-approval shoppers
Know your ceiling before talking to a lender, so you can shop for rates from a position of clarity.
Career changers expecting income growth
Re-run with projected income to gauge whether to wait a year before buying.
UK first-time buyers
Apply the 4.5× multiple plus your deposit to size up realistic neighbourhoods.
How Lenders Calculate What You Can Afford
Lenders use debt-to-income (DTI) ratios to determine how much you can borrow. The front-end DTI compares your proposed monthly housing costs (PITI — principal, interest, taxes, insurance) to your gross monthly income. Most lenders cap this at 28–31%. The back-end DTI compares all monthly debt payments (housing + car loans + student loans + credit cards) to gross income — typically capped at 36–43%.
For a household earning $90,000/year ($7,500/month), the 28% front-end rule allows maximum housing costs of $2,100/month. With $500/month in existing debts and the 36% rule, the maximum total debt is $2,700/month, leaving $2,200 for housing — the lower of these two figures is used. With a 7% rate and 30-year term, this translates to a mortgage of about $330,000.
In the UK, mortgage affordability is assessed differently. Lenders typically offer 4 to 4.5 times your gross annual income (joint income for couples). On a £60,000 salary, this means a maximum mortgage of £240,000–£270,000. However, lenders also conduct "stress tests" to ensure you could afford repayments if interest rates rose to 3% above the current rate (following Bank of England guidelines).
These are guidelines, not guarantees. Lenders also consider your credit score, employment type (salaried vs. self-employed), down payment size, and the specific property. First-time buyers in the UK may qualify for the Mortgage Guarantee Scheme (5% deposit government-backed scheme). US buyers may qualify for FHA loans (3.5% down, lower credit score requirements) or VA loans (0% down for eligible veterans).
🔬 Methodology & Accuracy
Formula: Applies the US 28/36 DTI rule (front-end housing 28% / back-end total debt 36%) and the UK 4.5× income multiple. Max loan is reverse-solved from the mortgage formula.
Data sources: Fannie Mae / Freddie Mac underwriting guidelines; FCA MCOB UK affordability rules.
Last reviewed: January 2026 · Accuracy: Results are precise to two decimal places using IEEE-754 double-precision arithmetic. Intended for educational and planning use only.
For informational purposes only. Results are estimates based on the inputs and formulas provided. For financial, tax, medical, or legal decisions, consult a qualified professional. Rates and regulations change — always verify current figures with official sources.
Accuracy & Feedback
❓ Frequently Asked Questions
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These tools naturally pair with the Home Affordability Calculator — use them in order to get a full view.