Formula
Monthly income = annual income ÷ 12. Allowed housing payment is the lower of housing-DTI cap and total-DTI cap after other debts. Maximum loan is the present value of the allowed principal-and-interest payment.
House Affordability Calculator
House Affordability Calculator estimates the home price supported by income, existing debts, down payment, target DTI, rate and ownership costs.
Worked example
With 95,000 annual income, 550 monthly debt, 80,000 down, 28% housing DTI and 36% total DTI, the calculator finds the lower monthly cap, subtracts taxes/insurance, then converts the remaining payment into a maximum loan.
Professional note
The limiting cap is the important clue. If total debts are the bottleneck, paying down existing debt can improve affordability more than stretching the mortgage term.
Regional and unit assumptions
Standard or basis: transparent fixed-rate amortising loan arithmetic with monthly payments. The page does not claim APR disclosure compliance, tax treatment, lender approval, affordability assessment or local mortgage-product rules.
Assumptions and limitations
- Uses gross income and user-entered DTI limits.
- Taxes and insurance are simple monthly deductions before calculating principal and interest capacity.
- No lender approval, credit score, mortgage insurance, closing costs, reserves or local rules are modelled.
- This is planning arithmetic only.
Methodology & Accuracy
How this calculator is checked
CalculationTime pages are built around visible arithmetic: the formula, assumptions, worked example and practical limitations are shown so the result can be checked rather than simply trusted.
Formula used
Monthly income = annual income ÷ 12. Allowed housing payment is the lower of housing-DTI cap and total-DTI cap after other debts. Maximum loan is the present value of the allowed principal-and-interest payment.
Standard or basis
Standard or basis: transparent fixed-rate amortising loan arithmetic with monthly payments. The page does not claim APR disclosure compliance, tax treatment, lender approval, affordability assessment or local mortgage-product rules.
Where a calculator follows a named legal, trade or industry standard, that standard is cited visibly. Otherwise the page uses transparent general arithmetic and states its limits.Master's Tip
The limiting cap is the important clue. If total debts are the bottleneck, paying down existing debt can improve affordability more than stretching the mortgage term.
Related calculators
Questions
How do you calculate a mortgage payment?
Subtract the down payment from the home price to get the loan amount, convert the annual rate to a monthly rate, then apply the fixed-payment loan formula across the total number of monthly payments.
Does this include property tax and insurance?
The principal-and-interest payment is calculated separately. Optional monthly property tax and insurance fields are then added to show a fuller housing-cost estimate.
What happens if the interest rate is zero?
With a zero rate, the calculator divides the loan amount evenly by the number of monthly payments.
Is this the same as an APR calculation?
No. APR can include fees and disclosure rules. This page uses a simple fixed-rate loan payment formula and states what is excluded.
Why does the term length matter so much?
A longer term spreads the loan across more payments, which usually lowers the monthly payment but can increase total interest paid over the life of the loan.
Calculation note
Affordability calculators reverse the normal mortgage payment formula: instead of asking what a house costs monthly, they ask what house price a monthly budget can support.
Income and debt come before house price
A useful affordability page starts with the borrower’s cash-flow limits, because those limits determine the payment that can be converted into a loan amount.
DTI caps create the payment ceiling
Housing-only and total-debt caps can produce different limits. The stricter cap controls the result.