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Home Affordability Calculator

Work backward from your income and debts to find the maximum home price a lender would approve.

Annual gross income

Monthly debts

Interest rate (%)

Loan term (years)

Down payment (%)

Max DTI (%)

What you entered

Income: $80,000Debts: $400/moRate: 6.5%DTI limit: 36%

1
Monthly gross income
$80,000.00 / 12= $6,666.67
2
Max housing payment (36% DTI − debts)
$6,666.67 × 36% − $400.00= $2,000.00
3
Max loan amount (PV of annuity)
PMT × [(1+r)^n − 1] / [r(1+r)^n]= $316,421.64
4
Max home price (20% down)
$316,421.64 / (1 − 20%)= $395,527.05

Result

Max home price: $395,527

With $80,000 annual income, $400/mo in debts, and a 36% DTI limit, you can afford up to a $395,527 home with 20% down.

Home price you can afford by income, at 36% DTI

Each row assumes $500 a month of other debt payments, a 20% deposit, and a 30-year mortgage at 6.5%, with total debt capped at 36% of gross monthly income.

Annual income	Max monthly payment	Max loan	Max home price
$50,000	$1,000	$158,211	$197,764
$75,000	$1,750	$276,869	$346,086
$100,000	$2,500	$395,527	$494,409
$125,000	$3,250	$514,185	$642,731
$150,000	$4,000	$632,843	$791,054
$200,000	$5,500	$870,160	$1,087,699

The rough shortcut this produces is a home price near five times gross income at these rates, well below the traditional rule of thumb - because interest rates do most of the work. At 3% instead of 6.5% the same income would support substantially more borrowing, which is why affordability moves with rates far more than with prices. Two cautions. The max monthly payment is for principal and interest only, while lenders count property tax, homeowners insurance, HOA dues and mortgage insurance inside the same DTI limit, so the real affordable price is lower than shown. And this is what a lender may approve, not what is comfortable - approval assumes nothing about childcare, retirement saving or the rest of your life.

Lenders use DTI to set your max

Lenders cap your total monthly debt payments (including the new mortgage) at a percentage of gross income — typically 36% for conventional loans, up to 43% for qualified mortgages. This calculator works backward from that cap to find your maximum home price.

Affordable and comfortable aren't the same thing

The maximum a lender approves isn't necessarily what you should spend — it doesn't account for property taxes, insurance, maintenance (1-2% of home value/year), or your other financial goals. Many advisors recommend buying 20-30% below your maximum.

How interest rates change affordability

A 1% rate increase reduces buying power by about 10%. At 6%, a $300,000 mortgage costs $1,799/month. At 7%, it costs $1,996/month ($197 more). To keep the same payment at 7%, you'd need to buy a ~$270,000 home instead. Rate shopping across 3+ lenders can save 0.25–0.5% on your rate.

Frequently asked questions

How much house can I afford on $100,000 salary?

Using the 28/36 rule at 7% rate with 20% down: max housing payment = $2,333/month (28% of $8,333 gross). After property tax and insurance (~$500/month), that leaves ~$1,833 for mortgage principal + interest, which supports about a $275,000 loan ($345,000 home with 20% down). Existing debts reduce this further.

What is the 28/36 rule for home buying?

Spend no more than 28% of gross monthly income on housing costs (mortgage, taxes, insurance) and no more than 36% on total debt (housing + car loans + student loans + credit cards). On $7,000 gross income: max housing = $1,960, max total debt = $2,520.

How much should I spend on a house?

Conservative: 2.5–3× your gross annual income. Moderate: 3–4×. Aggressive (lender max): 4–5×. On a $100K income: conservative is $250K–$300K, aggressive is $400K–$500K. Factor in your down payment, other debts, lifestyle spending, and how much you want to save each month.