Appearance

House Affordability Calculator

By Calxy · Updated · Calculation methodology

Estimate a home-price budget from income, existing debt, carrying costs and an available down payment.

Printed from Calxy · https://www.calxy.net/financial/house-affordability-calculator

Check your inputs—Complete valid inputs to calculate a current result.
USD / month

0.01 – 10,000,000,000 USD / month

USD

0 – 10,000,000,000 USD

%

0 – 100 %

%

0 – 100 %

USD

0 – 10,000,000,000 USD

USD

0 – 10,000,000,000 USD

%

0 – 100 %

years

1 – 50 years

Estimated home price budget

$319,465.74

  • Mortgage principal budget$259,465.74
  • Monthly principal and interest$1,640.00
  • Total housing budget$2,240.00
  • Down payment$60,000.00

The caps are editable planning assumptions, not approval thresholds. Keep closing costs and reserves separate from the down payment.

How this was calculated

  1. Housing cap = gross monthly income × housing sharePut in your numbers: $8,000.00 × 28%Answer: $2,240.00 a month
  2. Total-debt cap = gross monthly income × total debt share − other debt paymentsPut in your numbers: $8,000.00 × 36% − $500.00 = $2,880.00 − $500.00Answer: $2,380.00 a month
  3. Housing budget = smaller of the two caps (not below 0)Put in your numbers: min($2,240.00, $2,380.00)Answer: $2,240.00 a month
  4. Principal-and-interest budget = housing budget − tax, insurance, PMI and HOAPut in your numbers: $2,240.00 − $600.00Answer: $1,640.00 a month
  5. Payment per dollar borrowed = r(1 + r)^n ÷ ((1 + r)^n − 1), r = rate ÷ 12, n = years × 12Put in your numbers: r = 6.5% ÷ 12 = 0.00541667, n = 360: 0.00541667 × 6.991798 ÷ (6.991798 − 1)Answer: 0.00632068
  6. Loan amount = P&I budget ÷ payment per dollarPut in your numbers: $1,640.00 ÷ 0.00632068Answer: $259,465.74
  7. Home price budget = loan amount + down paymentPut in your numbers: $259,465.74 + $60,000.00Answer: $319,465.74

How house affordability is calculated

Take the smaller housing budget allowed by your two editable income ratios. Subtract property costs, then convert the remaining principal-and-interest payment into a loan balance. Add the down payment; keep closing costs outside it.

Worked example

At $10,000 monthly income, a 30% housing cap, no other debt, $500 monthly carrying costs, 0% interest and ten years, $2,500 per month supports $300,000 borrowed. A $20,000 down payment gives a $320,000 budget.

With the default inputs — $8,000 income, 28% and 36% caps, $500 other debt and $600 carrying costs — the housing budget is min($2,240, $2,380) = $2,240, leaving $1,640 for principal and interest. At 6.5% for 30 years each borrowed dollar costs $0.00632068 a month, so $1,640 supports $259,466; with $60,000 down the budget is about $319,466.

Frequently asked questions

Why does the result differ from the mortgage calculator’s budget mode?

This page derives the housing budget from income and debt assumptions. Mortgage budget mode starts with a housing payment you already chose. Neither is a lending decision.

References

Last updated . Results are estimates for informational purposes only.