How to use the affordability calculator
- Enter your gross annual income before tax. For a joint application, add both incomes.
- Add the minimum monthly payments on every other debt: car loans, student loans, credit card minimums and support payments. Do not include rent, utilities or groceries.
- Type the cash you will put down and the mortgage rate and term you expect.
- Set the local property tax rate, insurance and any HOA fees. These count toward the lender’s limit just like the loan payment does.
- Choose a DTI guideline or enter your own limits. The result updates as you type.
How the maximum price is worked out
Lenders test two ratios. The front-end ratio compares your housing payment with gross monthly income. The back-end ratio adds every other monthly debt. Your budget is the lower of the two limits:
Because property tax and PMI grow with the price, there is no neat one-line answer. The calculator tests prices by bisection until the payment lands on the cap, then rounds down to the whole dollar.
Worked example
A household earns $100,000 a year and pays $500 a month on a car loan. Monthly income is $8,333.33, so the 28% front-end cap is $2,333.33 and the 36% back-end cap is $3,000 − $500 = $2,500. The front-end cap is lower, so it sets the budget.
With $60,000 down, a 6.5% 30-year rate, 1.1% property tax, $1,500 insurance and 0.5% PMI, the highest price that fits is $341,333. The payment splits into $1,778.22 principal and interest, $312.89 tax, $125 insurance and $117.22 PMI.
The 20% line changes the answer
In that example, $60,000 is only 17.6% of $341,333, so PMI applies. Drop the price to $300,000 and the same deposit reaches 20%, which removes PMI entirely. The result panel shows that “20% down” price so you can see the trade-off between a bigger home and a cheaper monthly bill.
Key features
- Applies the front-end and back-end limits together and tells you which one is holding you back.
- Presets for conventional (28/36), FHA (31/43) and Canadian GDS/TDS (39/44) guidelines.
- Includes tax, insurance, HOA fees and PMI, not just the loan payment.
- Shows your price-to-income multiple for comparison with UK lending rules.
Practical use cases
US buyers can test whether paying off a car loan first raises the budget. If the back-end ratio is the limit, every $100 of monthly debt you clear adds about $15,800 of loan capacity at 6.5% over 30 years, a little less once tax on the higher price is counted.
UK buyers are usually assessed on an income multiple, most often 4 to 4.5 times gross income, plus an affordability check of spending. Compare the “price ÷ income” figure with that range.
Canadian buyers must pass the mortgage stress test. Enter the higher of your contract rate plus 2 points or 5.25% as the interest rate, and pick the GDS/TDS preset to mirror how lenders qualify you.