Home Affordability Calculator (Max Loan)
Estimates the largest mortgage you can afford based on your income, existing debts, a target debt-to-income ratio, and current loan terms. It converts your maximum affordable monthly payment into a loan amount.
Last updated: May 2026
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About this calculator
Lenders decide how much they will lend largely by your debt-to-income ratio (DTI) — the share of your gross monthly income that goes to debt payments. This calculator works backward from a target DTI to the largest loan you could support. First it finds your maximum total monthly debt budget: gross monthly income × target DTI. Then it subtracts your existing monthly debt payments (car loans, student loans, credit-card minimums) to get the amount left for a mortgage payment. Finally it converts that affordable payment into a loan principal using the standard mortgage formula, given the interest rate and term. For someone earning $120,000 a year ($10,000/month) targeting a 36% DTI with $500 in existing debts, the affordable payment is $10,000 × 0.36 − $500 = $3,100; at 6% over 30 years that supports a loan of roughly $517,000. The 36% figure is the classic "back-end" DTI limit many lenders prefer, while 43% is a common upper bound for qualified mortgages; conservative budgeters often target 28–33%. Note the result is the loan amount, not the home price — add your down payment to estimate the price you can shop for, and remember the mortgage payment here covers principal and interest only. Real affordability must also account for property taxes, homeowners insurance, HOA dues, and private mortgage insurance, which together (the "PITI" payment) are what lenders actually evaluate. Treat this as an upper limit set by lending rules, not a recommendation to borrow the maximum — buying below your ceiling leaves room for emergencies, rate changes, and the many costs of homeownership beyond the loan.
How to use
Example 1 — Dual-income household. Combined income $120,000/year, $500/month in existing debts, targeting 36% DTI, at a 6% rate over 30 years. Enter 120000, 500, 36, 6, 30. Result: about $517,000. Verify: $10,000 × 0.36 = $3,600 total debt budget; − $500 = $3,100 for the mortgage; at 0.5% monthly over 360 payments the loan factor is about 166.8, so 3,100 × 166.8 ≈ $517,000. ✓ Add your down payment for the shoppable home price. Example 2 — Conservative single buyer. Income $72,000/year ($6,000/month), no other debts, targeting a cautious 28% DTI, 6.5% rate, 30 years. Enter 72000, 0, 28, 6.5, 30. Result: about $265,800. Verify: 6,000 × 0.28 = $1,680 affordable payment; at 6.5% over 30 years that supports roughly $265,800 in principal. ✓
Frequently asked questions
What debt-to-income ratio should I target?
A common guideline is the 28/36 rule: keep housing costs under 28% of gross income (the front-end ratio) and total debt under 36% (the back-end ratio). Many lenders will approve back-end DTIs up to 43% for qualified mortgages, and some government-backed loans go higher, but borrowing to the maximum leaves little cushion. Conservative buyers often target 28–33% to keep room for savings, emergencies, and the non-loan costs of owning a home. The right number depends on your job stability, other financial goals, and how much risk you are comfortable carrying. This calculator lets you test different DTI targets to see how each changes your borrowing ceiling.
Is the result the home price or the loan amount?
It is the maximum loan amount — the principal a lender would extend based on your affordable payment. To estimate the home price you can shop for, add your planned down payment: a $517,000 loan with a $100,000 down payment supports roughly a $617,000 home. Keep in mind the calculation covers principal and interest only. Lenders actually qualify you on the full PITI payment (principal, interest, taxes, and insurance), plus any HOA dues and mortgage insurance, so your real maximum home price will be somewhat lower than loan-plus-down-payment alone suggests once those costs are included.
Why does the interest rate change how much I can borrow so much?
Because the monthly payment is fixed by your DTI budget, a higher rate means more of each payment goes to interest and less can support principal, shrinking the loan you qualify for. The effect is large: at a fixed $3,100 monthly payment over 30 years, dropping the rate from 7% to 5% can increase the supportable loan by tens of thousands of dollars. This is why affordability swings sharply with mortgage rates — the same income buys noticeably less house when rates rise. Always use a current, realistic rate, and consider testing a slightly higher rate to stress-test your budget against future increases.
What costs does this calculator leave out?
It calculates only the principal-and-interest portion of your mortgage. It excludes property taxes, homeowners insurance, private mortgage insurance (required on many loans with less than 20% down), HOA or condo fees, and ongoing maintenance — all real costs that lenders and prudent buyers factor in. It also ignores closing costs and your down payment, which determine the home price separately. Because of these omissions, treat the result as an optimistic upper bound. A safer approach is to budget the full monthly housing cost (PITI plus HOA) against your DTI target rather than principal and interest alone.
When should I not borrow up to this maximum?
Borrowing the maximum is rarely wise. Avoid it if your income is variable or commission-based, if you lack a solid emergency fund, or if you have major upcoming expenses (children, education, career change). The calculator assumes your income and rate stay favourable; a job loss, a rate reset on an adjustable loan, or a big repair can make a maxed-out payment unsustainable. It also does not consider your other financial goals like retirement saving. Most financial advisors suggest buying comfortably below your ceiling so housing does not crowd out savings and flexibility. Use this number as a limit, not a target.