Estimate the home price you can afford using income, debts, deposit/down payment, mortgage term, interest rate, taxes, insurance, and housing ratios.
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One of the most important financial decisions you'll ever make is buying a home — and one of the most common mistakes buyers make is letting a lender decide how much they can afford rather than deciding themselves. A lender will approve you for the maximum you qualify for. That number and the amount that makes sense for your life are often very different. This free house affordability calculator helps you find your realistic home buying budget using your actual income, debts, down payment, and the real costs of homeownership — not just the mortgage payment.
The most widely used affordability guideline in US mortgage lending is the 28/36 rule: spend no more than 28% of your gross monthly income on housing costs (mortgage principal, interest, taxes, and insurance — called PITI), and no more than 36% of gross income on all debt payments combined (housing + car loans + student loans + credit cards). These thresholds come from decades of mortgage underwriting research and are used as guidelines by the US Department of Housing and Urban Development (HUD).
Example: Annual household income $90,000 → monthly gross $7,500. Maximum housing payment (28%): $2,100/month. Maximum total debt (36%): $2,700/month. If you have $600/month in car and student loan payments, your housing budget drops to $2,100 to stay within the total debt threshold.
DTI stands for Debt-to-Income ratio — your total monthly debt payments divided by your gross monthly income, expressed as a percentage. It's the single most important number mortgage lenders use to evaluate affordability. Most conventional mortgages require a back-end DTI (all debts) of 43% or less. FHA loans allow up to 57% in some cases. VA loans are more flexible. Jumbo loans typically require 43% or below, often 36%.
Lower DTI = easier approval + better rates. A DTI above 43% will disqualify you from most conventional mortgages even with a good credit score. Use our Debt-to-Income Ratio Calculator to check where you stand before applying.
The down payment directly affects your loan size, your monthly payment, and whether you pay PMI (Private Mortgage Insurance). Here's the breakdown: 3%–5% down: available on conventional loans for first-time buyers; PMI required | 10% down: reduces PMI cost significantly | 20% down: eliminates PMI entirely — a major ongoing saving | 3.5% down: FHA loans (credit score 580+) | 0% down: VA loans for eligible veterans and active military; USDA loans for rural properties.
PMI typically costs 0.5%–1.5% of the loan amount annually — on a $350,000 loan, that's $1,750–$5,250/year added to your housing cost until you reach 20% equity. For many buyers in high-cost areas, saving for 20% down is a multi-year goal that significantly changes the affordability equation. Use our Down Payment Calculator to find how long it'll take to save your target.
The mortgage payment is just one piece. Budget for these ongoing costs: Property taxes: average 1.1% of home value annually in the US, but varies enormously by state (0.27% in Hawaii to 2.23% in New Jersey) | Homeowner's insurance: average $1,200–$2,000/year | HOA fees: $200–$500/month in many developments | Maintenance and repairs: budget 1%–2% of home value annually | Utilities: typically $150–$400/month above what renters pay | PMI (if applicable).
On a $400,000 home with a 10% down payment and a 30-year mortgage at 6.8% APR, your principal and interest payment is approximately $2,349/month. Add $400 property taxes, $180 insurance, $200 HOA, and $333 maintenance reserve — your real monthly housing cost is closer to $3,462. That's the number to plan around. The CFPB's Owning a Home resource covers all costs in detail.
A commonly used rule of thumb is that your home price should be no more than 2.5–3× your annual household income. In low-cost markets, 3–4× may be manageable; in high-cost markets like NYC or San Francisco, buyers often stretch to 5–6× income — though this significantly increases financial stress risk. Examples: $60,000 income → affordable home price approximately $150,000–$180,000 | $90,000 income → $225,000–$270,000 | $120,000 income → $300,000–$360,000 | $150,000 income → $375,000–$450,000. These are starting points — actual affordability depends heavily on your existing debts, down payment, and local property taxes.
Home affordability varies dramatically by state. The most affordable states for homebuyers in 2026 based on median home price to median income ratios include Mississippi, West Virginia, Arkansas, Indiana, and Ohio — where median home prices are often 3–4× median household income. The least affordable include California, Hawaii, and New York — where ratios exceed 10× in major metro areas. The US Census Bureau publishes comprehensive housing cost and income data by state and metro area.
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On $50,000/year gross income, the 28% rule allows approximately $1,167/month for housing costs (PITI). Depending on your local market, down payment, and debts, this could afford a home in the $150,000–$200,000 range in lower-cost states. In high-cost markets like California or New York, $50,000 income makes homeownership very difficult without significant down payment savings or a co-buyer. FHA loans with 3.5% down can expand options for lower-income buyers.
Conventional loans typically require a minimum 620 credit score. FHA loans allow as low as 500 (with 10% down) or 580 (with 3.5% down). VA loans have no official minimum but most lenders require 580–620. A score of 740+ gets you the best available mortgage rates. The difference between a 620 and 740 score on a $300,000 mortgage can be 0.5%–1% in APR, translating to $25,000–$50,000 more in total interest over 30 years.
This house affordability calculator provides estimates for planning purposes only and does not constitute mortgage advice or a loan commitment. Actual mortgage qualification depends on your full financial picture including credit score, employment history, assets, and lender-specific requirements. Consult a HUD-approved housing counselor (find one at HUD.gov) or a licensed mortgage professional before making home buying decisions.
The 28/36 rule: housing costs (PITI) under 28% of gross monthly income; total debt under 36%. On $96,000 salary ($8,000/month gross), the max housing payment is $2,240. At 6% interest, $400 monthly property tax, $150 insurance, and 20% down, that supports a home price around $375,000. Our house affordability calculator reverse-engineers the maximum price from your income, debts, and assumptions.
US lenders qualify up to 43–50% DTI under modern QM/QM-Patch rules; UK lenders typically cap at 4–4.5× annual salary. These limits are what you CAN borrow, not what you SHOULD. The 28/36 rule, the 25% take-home rule, or your own budget produce smaller numbers. Most financial advisors recommend the smaller of the two — but most buyers borrow the larger.
Conventional loans below 20% down trigger PMI ($60–200/month per $100k borrowed). FHA loans allow 3.5% down but include lifetime MIP. VA loans require 0% down for eligible veterans. UK first-time buyers commonly use 5–10% with various government schemes. Our calculator factors PMI/MIP into the affordable price — many buyers find the affordable price drops $30–50k when realistic PMI is added.
US closing costs run 2–5% of purchase price (title, escrow, origination, recording). UK Stamp Duty Land Tax is tiered: 0% to £250k for first-time buyers (up to £425k FTB relief), 5% to £925k, 10% to £1.5M, 12% above. Buy-to-let adds 5% surcharge. Our calculator adds these to the cash-needed-at-closing figure so you size the deposit correctly.
US property tax averages 1–2.5% of home value per year, varies by state. Top-decile states (NJ, IL): 2%+ . Bottom-decile (HI, AL): 0.3–0.5%. UK Council Tax bands run £1,000–4,000/year for average homes. Our affordability calculator factors local rates into the monthly PITI — many buyers underestimate by 30–50% when they assume a single national average.
Under the 28/36 rule: around $280k–$310k at 6% interest, 20% down, average tax and insurance. Lender max may go up to $400k but is not advised.
Housing costs (PITI) under 28% of gross monthly income; all monthly debts under 36% of gross monthly income.
20% avoids PMI/MIP and gets the best rates. 3.5% (FHA) or 5% (conventional) work but add monthly insurance and require higher salary.
No. Plan 2–5% of purchase price (US) or factor Stamp Duty + legal fees (UK) on top of deposit.
The 28/36 number. The lender approves what you can borrow; the rule defines what you can afford without sacrificing other goals.