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Calcora

Housing

Home Affordability Calculator

Estimate a home price from your income, monthly debt, down payment, and mortgage rate, using debt-to-income ratios you choose. A planning estimate.

Your income, debts, and assumptions

Enter your income, debts, and down payment, the mortgage terms you want to assume, and the debt-to-income ratios to plan with. Calcora solves for the home price whose modeled payment fits them.

Income and debts

Income before taxes for a year.

Examples may include car loans, student loans, credit-card minimums and other recurring debt payments. Leave blank for none.

Down payment and mortgage

The cash you put toward the home price. Use 0 for none.

The mortgage APR to assume. Use 0 for a 0% loan.

Loan term unit

How long you would repay the mortgage, in years or months.

Housing cost assumptions

Property tax and insurance are rates you assume, as a percentage of the home price a year. Calcora does not look up local taxes or insurance, and never adds mortgage insurance on its own.

Enter the annual property tax rate you want to assume as a percentage of the home price.

The yearly premium you want to assume, as a percentage of the home price.

Enter a monthly mortgage insurance amount if it applies to your loan.

Homeowners association dues, if any.

Ratio limits

Planning assumptions you can change, not lender rules. 28% and 36% are often used as a starting point; lenders and loan programs set their own limits.

The share of gross monthly income allocated to housing costs in this estimate, as a percent: 28 means 28%.

The share of gross monthly income allocated to housing costs plus recurring debt payments, as a percent: 36 means 36%.

Private by design

Your income, debts, down payment, and assumptions stay in your browser and are not sent to Calcora.

How home affordability is estimated

The calculator works backward from your income to a home price, in five steps.

  1. Work out gross monthly income

    Gross annual income divided by 12, rounded to the cent. The ratios are shares of this amount.

  2. Apply the housing ratio

    Gross monthly income × the housing ratio gives the most the housing payment may be under that ratio.

  3. Apply the total debt ratio

    Gross monthly income × the total debt ratio, minus your monthly debt payments, gives what that ratio leaves for housing.

  4. Use the lower limit

    Whichever ratio allows less sets the limit on the monthly housing payment for this estimate.

  5. Solve for the home price

    Calcora searches whole cents for the highest home price whose modeled payment, with principal and interest, tax, insurance, mortgage insurance, and HOA, fits that limit.

What goes into the estimate

Gross income and monthly income

Gross income is income before taxes. Debt-to-income ratios are usually measured against gross monthly income, so the calculator divides the annual amount by 12.

Housing ratio

The share of gross monthly income allocated to the housing payment, sometimes called the front-end ratio. A higher ratio allows a larger payment and a higher estimated price, and leaves less of your income for everything else.

Total debt ratio

The share of gross monthly income allocated to the housing payment plus recurring debt payments, sometimes called the back-end ratio. Debts count against this ratio only.

Existing monthly debts

Recurring payments such as car loans, student loans, and credit card minimums. Each dollar of debt payments reduces what the total debt ratio leaves for housing by a dollar.

Down payment

The cash you put toward the price. The rest is the mortgage. A larger down payment means less is borrowed, so the same payment can support a higher price.

Interest rate and loan term

The APR and term set the principal and interest payment on each dollar borrowed. A higher APR or a shorter term means fewer dollars can be borrowed for the same payment.

Property tax and insurance assumptions

Because the price is unknown, property tax and insurance are rates you assume, applied to each price tried. They are not local tax rates or insurance quotes, which depend on the home and where it is.

What this estimate does not include

The housing payment covers principal and interest, property tax, homeowners insurance, mortgage insurance, and HOA. Owning a home costs more than that.

  • Utilities, maintenance, and repairs
  • Closing costs, moving, and furnishing
  • Commuting and other living costs
  • Income taxes and any tax deductions
  • Emergency savings and investment returns
  • Changes in rates, taxes, insurance, or income over time

Example affordability calculation

$120,000 of gross annual income, $800 of monthly debt payments, and $80,000 down, with a 6.5% APR over 30 years, 1.2% property tax, 0.5% insurance, $100 of HOA a month, no mortgage insurance, and 28% and 36% ratios. Calculated the same way as the calculator above.

The ratio limits

Gross monthly income
$10,000.00
Housing-ratio limit
$2,800.00
Total debt allowance
$3,600.00
Total-debt-ratio limit, after debts
$2,800.00
Limit used
$2,800.00
Limiting ratio
Both ratios

Both ratio limits are effectively the same: each allows $2,800.00 a month for housing.

The estimate

Estimated home price
$414,309.74
Down payment (19.31%)
$80,000.00
Estimated mortgage amount
$334,309.74
Principal & interest
$2,113.06
Property tax
$414.31
Homeowners insurance
$172.63
HOA
$100.00
Estimated monthly housing payment
$2,800.00
Modeled total debt ratio
36.00%

One cent more on the price would push the modeled payment over the $2,800.00 limit. This is a planning estimate, not a lender approval.

Assumptions

  • This is a planning estimate based on the values you enter. It is not a mortgage approval, a lending decision, or advice, and lenders apply their own standards.
  • Gross monthly income is gross annual income ÷ 12, rounded half up to the cent. Each ratio limit is gross monthly income × the ratio, rounded down to the cent; the total debt ratio limit subtracts your monthly debt payments and is never below $0. The lower limit is used.
  • The housing payment is principal and interest, property tax, homeowners insurance, mortgage insurance, and HOA, worked out exactly as in Calcora's Mortgage Calculator for each price tried.
  • Property tax and insurance are the annual rates you enter × the home price, rounded half up to the cent, then divided by 12 and rounded again. They are assumptions, not local rates or quotes.
  • Mortgage insurance is only the monthly amount you enter. It is never added, changed, or removed based on the down payment, and it is left out when there is no mortgage.
  • The estimate is the highest price, to the cent, whose payment fits the limit: one cent more would not fit. Prices are searched from the down payment up to $100,000,000; a result at that cap is reported as a cap, not as a real limit.
  • The APR is fixed for the whole term. Closing costs, maintenance, utilities, and taxes on income are not included, and costs are treated as constant.

How Calcora calculates

  • Every calculator explains the formula behind its result in plain language.
  • Calculators are designed to run in your browser, so your inputs are not sent to Calcora.
  • Results help you understand your options. They are not financial advice.
Read the methodology

Frequently asked questions

Is this how much a lender will approve?
No. It is an educational planning estimate built from the values and ratios you enter. Lenders look at credit, income documentation, reserves, the property, and their own ratio limits, which can differ from the ones here.
Are 28% and 36% the rules lenders use?
They are a common starting point, not a universal rule. Loan programs and lenders set their own limits, sometimes higher. Change the ratios to see how the estimate responds.
Why does a larger down payment raise the estimated price?
The payment limit stays the same, but less of the price is borrowed, so less of each month's payment goes to principal and interest. Property tax and insurance still rise with the price.
Why do my debts lower the estimate?
Debts count against the total debt ratio. When that ratio is the lower limit, every dollar of monthly debt payments is a dollar less for housing.
Where do the property tax and insurance figures come from?
From the rates you enter, applied to each price tried. Calcora does not look up local tax rates or insurance prices; enter rates that reflect the homes and area you have in mind.
How is this different from the Mortgage Calculator?
The Mortgage Calculator starts with a home price and estimates the monthly payment. This calculator starts with income, debts, and ratio assumptions and solves backward for the highest home price whose modeled payment fits them.
Does Calcora store my information?
No. The calculation runs in your browser. Your income, debts, down payment, and assumptions are not sent to Calcora or saved, and they are cleared when you leave or reload the page.

Related calculators

Have a price in mind? The Mortgage Calculator starts from the home price and shows the monthly payment, its parts, and the full amortization schedule.