Financing · Formula v1.0.0
Home Affordability Calculator
Estimate the home price your income can support under configurable debt-to-income assumptions, clearly labelled as an estimate, not an approval.
Estimated affordable home price
$457,608
Assumes 36% back-end / 28% front-end DTI
- Monthly gross income
- $10,000
- Back-end DTI budget for housing(Income × DTI limit) − existing debts
- $3,000
- Front-end DTI budget for housing
- $2,800
- Binding constraint
- Front-end DTI (housing only)
- Monthly housing budget
- $2,800
- Less tax, insurance & HOA
- -$475.00
- Maximum principal & interest
- $2,325.00
- Maximum loan amount
- $377,608
- Estimated affordable home price
- $457,608
- Down payment as share of priceBelow ~20% may add mortgage insurance costs
- 17.5%
- Resulting monthly housing payment
- $2,800
- Resulting total DTI
- 34.0%
Affordability is usually governed by debt-to-income (DTI) ratios: the share of your gross monthly income already committed to debts, plus what the new home payment would add.
Two caps work together. The front-end cap limits housing costs alone; the back-end cap limits housing plus all other monthly debts. The smaller of the two becomes your housing budget, from which taxes, insurance and HOA are subtracted before solving for the maximum loan and price.
Because every assumption is editable, you can test conservative vs aggressive scenarios, and see why the result is an estimate, not an approval.
Housing budget = min(Income/12 × front-end DTI, Income/12 × back-end DTI − existing debts) · Max loan = P&I budget × (1 − (1+r)⁻ⁿ) ÷ r
Front-end DTI: Housing payment ÷ gross monthly income.
Back-end DTI: (Housing payment + all monthly debts) ÷ gross monthly income.
r, n: Monthly interest rate and number of payments.
Household income $120,000 ($10,000/month), $600 existing debts, $80,000 down, 6.25% and 30 years, $350/mo tax + $125 insurance.
Back-end cap = 10,000 × 36% − 600 = $3,000. Front-end cap = $2,800. Housing budget = $2,800; after $475 of tax/insurance, max P&I ≈ $2,325.
That P&I supports a loan of roughly $378,000, so an affordable price around $458,000, with the front-end DTI as the binding constraint.
- •Ignores closing costs, moving costs, PMI and maintenance reserves.
- •Assumes stable gross income and the rate/term you enter.
Formula reference
Housing budget = min(Income/12 × front-end DTI, Income/12 × back-end DTI − existing debts) · Max loan = P&I budget × (1 − (1+r)⁻ⁿ) ÷ r
- Front-end DTI, Housing payment ÷ gross monthly income.
- Back-end DTI, (Housing payment + all monthly debts) ÷ gross monthly income.
- r, n, Monthly interest rate and number of payments.