Mortgage Affordability Calculator
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
Mortgage Affordability Calculator
Banks will lend you more than you should borrow. This calculator shows what you can actually afford — based on your income, debts, and a payment that won’t stress your budget.
[INTERACTIVE CALCULATOR PLACEHOLDER]
Inputs:
- Gross annual income
- Monthly debt payments (car, student loans, credit cards)
- Down payment amount
- Interest rate (default: current average 30-year rate)
- Desired monthly payment limit
- Property tax rate (default: 1.1%)
- Homeowner’s insurance estimate (default: $1,200/year)
- PMI (if down payment < 20%: 0.5-1% of loan annually)
Outputs:
- Maximum affordable home price
- Monthly payment breakdown (principal, interest, taxes, insurance, PMI)
- Debt-to-income ratio
- Conservative vs aggressive affordability range
The Real Rules of Affordability
The 28/36 Rule
- 28% rule: Your total housing payment (PITI: principal, interest, taxes, insurance) should not exceed 28% of gross monthly income
- 36% rule: Total monthly debt payments (housing + car + student loans + credit cards) should not exceed 36% of gross monthly income
Our Recommended Rule: 25% of Take-Home Pay
The 28/36 rule uses gross income. We recommend 25% of net (take-home) pay for the housing payment. This is more conservative but prevents the “house poor” trap — owning a nice home but having no money for savings, travel, or emergencies.
| Gross Income | 28% of Gross (Lender Limit) | 25% of Take-Home (Our Recommendation) |
|---|---|---|
| $75,000 | $1,750/month | $1,200/month |
| $100,000 | $2,333/month | $1,600/month |
| $150,000 | $3,500/month | $2,300/month |
| $200,000 | $4,667/month | $3,100/month |
The difference is significant. At $100K income, the bank says you can handle a $2,333/month payment. We say $1,600/month leaves room for retirement savings and life.
Hidden Costs Banks Don’t Include
| Cost | Estimate |
|---|---|
| Property taxes | 0.5-2.5% of home value/year (varies by state) |
| Homeowner’s insurance | $1,000-$3,000/year |
| PMI (if <20% down) | 0.5-1.0% of loan amount/year |
| Maintenance | 1-2% of home value/year ($3,000-$8,000 for a $400K home) |
| HOA fees | $0-$500+/month |
| Utilities | $200-$500/month |
A $400,000 home with a $2,100/month mortgage actually costs $3,000-$3,500/month when you include all these.
Related Tools
- Mortgage Rates by State: Live Comparison (2026)
- Retirement Savings Calculator (Interactive Tool)
- Debt Payoff Calculator: See Your Free Date
This content is for informational purposes only and does not constitute financial advice. Consult a licensed financial professional before making financial decisions.