Home Affordability Calculator

This calculator estimates the highest home price that fits within your income-based planning assumptions, existing debts, and available cash. It uses your gross household income, a selected housing-to-income ratio and total debt-to-income ratio, your down payment, closing costs, and estimated monthly housing costs — property taxes, homeowners insurance, PMI, and HOA fees — to find the price where your projected monthly payment stays within your selected budget and your cash to close stays within your available funds. The result is a planning estimate only and does not constitute loan approval, a prequalification, or a lending commitment.

The calculator enforces two constraints simultaneously: the monthly payment must stay within your income-based budget, and the cash required to close — your down payment plus closing costs and prepaid expenses, minus any credits — must not exceed your usable purchase cash. When your down payment, closing costs, and prepaid expenses together consume most of your available funds, the cash constraint can limit your affordable price below what your income alone would allow. Increasing your available savings, reducing closing costs, seeking seller credits, or choosing a lower down payment percentage are some of the ways to ease a cash-limited result.

The housing ratio is the share of your gross monthly income you plan to allocate toward your monthly housing costs — principal, interest, taxes, insurance, and other lender-counted items. The total debt-to-income ratio adds your existing recurring monthly debts to your housing cost and compares the total against gross income. Lenders often use ratios near 28% for housing and 36% for total DTI as planning guidelines, but actual requirements vary widely by loan program, lender, credit profile, and other underwriting factors. These fields are editable so you can model different assumptions.

The lender-style monthly housing payment includes principal and interest, monthly property taxes, homeowners insurance, supplemental or flood insurance, mortgage insurance (PMI if applicable), and HOA or condominium fees and special assessments. Maintenance reserves, additional utilities, and other personal ownership costs are added separately to produce the estimated all-in homeowner cost, which is a broader picture of what homeownership may actually cost each month beyond what a lender formally counts.

PMI, or private mortgage insurance, is a monthly cost that conventional lenders typically require when the down payment is less than 20% of the purchase price. It protects the lender, not the buyer, in case of default. The rate varies by loan size, down payment percentage, and borrower profile. This calculator defaults PMI to none when the down payment is 20% or more, and shows an optional PMI field when it is below 20%. Whether PMI is actually required, and at what rate, depends on the specific loan program and lender — this is a planning estimate only.

No. This is a planning estimate based on the numbers you enter. Actual mortgage approval depends on your credit history, employment documentation, income verification, debt-to-income calculation using lender-specific methods, reserves, property appraisal, loan type, down payment, and many other underwriting factors that this calculator does not evaluate. Use the results here to understand direction and explore scenarios, then work with a licensed lender for an actual prequalification or preapproval based on your full financial profile.

The calculator uses a binary search method, iterating through candidate home prices to find the highest price that satisfies both the monthly payment constraint and the cash-to-close constraint simultaneously. For each candidate price, it computes the down payment, loan amount, principal-and-interest payment, property taxes, insurance, PMI, HOA fees, and cash to close, then checks whether both constraints are met. This approach accounts for the fact that property taxes, PMI, and down payment amounts can all depend on the home price itself.

The limiting factor is the constraint that is most directly determining your estimated affordable price. If your monthly income-based budget is reached before the cash constraint, income is the primary limit. If your available cash for the down payment and closing costs runs out first, cash is the primary limit. Understanding which factor is binding helps you decide where to focus: on saving more cash, reducing closing costs, seeking a lower interest rate, or increasing income. The calculator shows which factor is limiting and offers relevant observations.