Mortgage Affordability Calculator

Last updated: August 4, 2026 · Data sources: CFPB, Fannie Mae Selling Guide, Freddie Mac, HMDA. Rate examples reflect 2026 market averages and are for education only.

How This Mortgage Affordability Calculator Works

This mortgage affordability calculator uses the standard 28/36 rule, which is the debt-to-income (DTI) framework most US lenders follow to determine how much home you can qualify for. It takes your gross annual income, monthly debt obligations, down payment, interest rate, and loan term, then computes the maximum monthly housing payment and the corresponding maximum loan amount.

The 28/36 Rule Explained

The 28/36 rule sets two limits on your monthly cash flow relative to your gross income:

The front-end ratio caps your housing payment — principal, interest, property taxes, and insurance (PITI). The back-end ratio caps your total debt load, including the housing payment plus credit cards, car loans, student loans, and any other recurring obligations. The calculator uses the lower of the two limits to determine your maximum payment.

PITI Calculation

PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment. Principal and interest come from the amortization formula. Property taxes are usually 0.5% to 2% of the home value annually, depending on location. Insurance typically runs 0.3% to 0.5% of the home value per year.

Loan Amount Calculation

The maximum loan amount is calculated using the present value of an ordinary annuity formula, which determines how much money can be borrowed given a fixed monthly payment, interest rate, and loan term:

Where PV is the maximum loan amount (present value), PMT is the maximum monthly payment from the DTI ratios, r is the monthly interest rate, and n is the total number of payments.

Private Mortgage Insurance (PMI)

When the down payment is less than 20% of the home value, PMI is typically required. This calculator includes a 0.5% annual PMI rate in the affordability calculation when applicable. PMI adds to your monthly housing cost and reduces the maximum loan amount you qualify for. Once your loan-to-value ratio reaches 80%, you can request PMI cancellation; it is automatically cancelled at 78% LTV.

What Counts in Your Debt-to-Income Ratio

Lenders look at two DTI numbers, and both matter. The front-end ratio only counts your housing payment. The back-end ratio adds every other recurring debt that shows up on your credit report:

• Minimum credit card payments (the statement minimum, not what you actually pay)
• Auto loan payments, including leases
• Student loan payments, even if deferred (lenders typically use 1% of the balance if no payment is reporting)
• Personal loans and installment loans
• Child support and alimony
• Co-signed loan payments, even if someone else pays them

Notice what is not on that list: groceries, gas, utilities, gym memberships, and daycare. Lenders do not count living expenses because those amounts vary too much household to household. But you should — a payment a lender approves on paper can still wreck your real-world budget. Run the calculator number, then subtract your actual monthly spending to see what is left for housing.

2026 Affordability Landscape

The 2026 housing market has eased a bit for buyers compared with the 2023 peak. The 30-year fixed mortgage rate has settled into the low-to-mid 6% range, down from the 7% plus levels of 2023 and 2024, according to Freddie Mac's Primary Mortgage Market Survey. For the latest figures across loan types, see our average mortgage rate tracker. Home price growth has cooled in many metros, and inventory is up year over year in places like Austin, Phoenix, and Tampa.

That does not mean affordability is easy. A household earning the US median income of about $80,000, with 10% down and a 6.5% rate, maxes out around $290,000 to $310,000 — well below the median US home price near $420,000. Affordability is much better in the Midwest and parts of the South, and notably worse on the coasts. Use the calculator with your local numbers rather than national averages.

Two trends worth noting for 2026 buyers. First, more sellers are offering rate buydowns and closing cost credits, which can effectively lower your monthly payment without changing the sticker price. Second, Fannie Mae and Freddie Mac have expanded programs that allow borrowers to use income from boarders and accessory dwelling units in some cases, which can raise your qualifying income. Ask your lender about House-Share and HomeReady / Home Possible if either applies to your situation.

Hidden Costs Beyond the Mortgage

The affordability calculator focuses on PITI because that is what lenders measure. But owning a home comes with costs the bank does not count:

• HOA fees: $50 to $500+ per month in many subdivisions and condos, due whether you use the amenities or not
• Maintenance and repairs: budget 1% of home value per year — about $4,000 on a $400,000 home
• Utilities: often higher than renting, especially in larger or older homes with single-pane windows
• Property tax increases: assessments can jump after a sale or following a renovation
• Closing costs on purchase: 2% to 5% of the price, separate from your down payment

A practical move: take the calculator's maximum home price and shave 10% to 15% off as a buffer for these real-world costs. Lenders will approve you at the edge of the 28/36 rule; responsible buyers usually back off from that edge.

How to Boost Your Affordability

If the calculator shows you are short of the home price you want, four levers can move the number:

1. Pay down debt. Every $200 of monthly debt you erase frees up roughly $560 of additional housing payment under the 36% back-end cap. Knocking out a car loan before applying is one of the fastest wins.
2. Raise your credit score. Moving from 680 to 740 can drop your rate by 0.25% to 0.5%, which raises purchasing power by tens of thousands on a 30-year loan. Pay down credit card balances to under 10% of the limit in the two months before applying.
3. Increase your down payment. More cash in means a higher home price ceiling and possibly no PMI. Gift funds from family are allowed by most loan programs with proper documentation.
4. Shorten the loan term. A 15-year loan has a lower rate but a higher payment — helpful only if your binding constraint is the back-end ratio, not the front-end. Most buyers max out the front-end first, so this rarely helps.

Affordability Calculator Example

Say you earn $90,000 a year ($7,500 per month gross), have $300 in monthly debt payments, can put down $20,000, and the current rate is 7% on a 30-year fixed loan. The 28% front-end limit allows a maximum housing payment of $2,100. The 36% back-end limit allows $2,700 total debt, minus $300 existing debt = $2,400 for housing. The binding limit is the lower one: $2,100. After accounting for estimated taxes and insurance, the calculator translates that payment into a maximum loan amount of approximately $315,000, plus your $20,000 down payment, for a maximum home price around $335,000.

Try raising your income or lowering your debt to see how the ceiling moves. If you want to see the full monthly payment breakdown for a specific home price, use the mortgage calculator to run the amortization schedule. If you already own and want to know whether refinancing helps, the mortgage refinance calculator shows the break-even math. For the bigger rent-versus-own question, the rent vs buy calculator compares total costs over your expected time horizon. If you prefer the simpler "how much house can I afford" framing, the home affordability tool covers the same math with a different angle.