Home Affordability Calculator

A common guideline is to keep your total housing costs below 28% of your gross monthly income. For example, on a $85,000 annual salary (~$7,083/month), a comfortable housing budget would be around $1,983/month. Combined with your down payment and current interest rates, that typically translates to a home price of roughly 3–5× your annual income. See also our calculate Rental Yield Gross Rental Yield.

Lenders use two debt-to-income (DTI) ratios. The front-end ratio compares your monthly housing costs (mortgage, taxes, insurance, HOA) to your gross monthly income. The back-end ratio adds all monthly debt payments to that housing cost. Most conventional lenders prefer a front-end DTI under 28% and a back-end DTI under 36%.

Mortgage qualification depends on your income, credit score, existing debts, down payment, and the loan program. This calculator uses standard DTI guidelines to estimate your qualifying amount. For a personalized figure, get pre-qualified with a lender — they'll factor in your full credit profile.

The minimum down payment varies by loan type: conventional loans typically require 3%–20%, FHA loans require 3.5% (with a 580+ credit score), and VA/USDA loans may require 0% down for eligible borrowers. Putting down at least 20% avoids private mortgage insurance (PMI), which can add $100–$200+ to your monthly payment. You might also find our How Much House Can I Afford useful.

Beyond principal and interest, budget for property taxes, homeowner's insurance, HOA fees (if applicable), private mortgage insurance (PMI if down payment < 20%), maintenance (typically 1%–2% of home value annually), and closing costs (usually 2%–5% of the purchase price).

Affordability is based on what fits comfortably within your budget given your lifestyle and goals. Pre-qualification is based on what a lender is willing to loan you based on your financial profile. Lenders may approve you for more than you're comfortable spending — it's wise to borrow less than the maximum if it means a more manageable monthly payment.

With a $50,000 annual income and minimal debts, you could afford a home in roughly the $140,000–$200,000 range, assuming a standard down payment and a 6–7% interest rate. Your front-end housing budget would be around $1,167/month (28% rule). Adding more debt or a smaller down payment will reduce this estimate.

Knowing your price range before you start house hunting prevents disappointment and helps you focus on realistic options. It also speeds up the buying process since you'll be financially prepared, and it protects you from overextending — a key factor in long-term financial stability.