House Affordability Calculator

How this result is built

Turn income, debts, and a down payment into a home price using housing-ratio limits you can edit.

Affordability is a payment limit, then a loan that fits inside it. The front-end ratio caps housing alone. The back-end ratio caps housing plus the debts you already pay. The tighter of the two sets the payment, and tax and insurance are removed before the loan is sized.

What the opening example is for

The defaults are the familiar 28 and 36. They are inputs because lenders, and your own comfort, do not have to match a textbook.

The walkthrough below uses the numbers already sitting in House Affordability Calculator. Press Calculate and the headline should match this page. Then put your own figures in. The math does not run until you press the button, and Clear hides the result.

What each field is doing

The “Gross annual income” line on House Affordability Calculator starts at $120,000.00. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

House Affordability Calculator treats “Other monthly debt payments” as its own entry, and the form opens with $450.00. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

Before you replace it, “Down payment available” reads $60,000.00 on House Affordability Calculator. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

Look at “Expected interest rate” first if you are checking House Affordability Calculator: the filled value is 6.50%. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

The “Loan term” line on House Affordability Calculator starts at 30. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

The remaining fields

House Affordability Calculator treats “Housing ratio limit” as its own entry, and the form opens with 28%. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

Before you replace it, “Total debt ratio limit” reads 36% on House Affordability Calculator. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

Look at “Property tax per year” first if you are checking House Affordability Calculator: the filled value is $4,800.00. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

The “Insurance per year” line on House Affordability Calculator starts at $1,600.00. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

House Affordability Calculator treats “HOA per month” as its own entry, and the form opens with $0.00. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

The opening result, line by line

Press Calculate on the opening form and Comfortable home price is $418,611.19. That is the number the rest of this section is talking about.

Maximum housing payment is $2,800.00 when you run the opening figures on House Affordability Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, room for principal and interest is $2,266.67. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

House Affordability Calculator reports that estimated loan is $358,611.19. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

How those lines were produced

Front-end ratio used is 28.00% when you run the opening figures on House Affordability Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, back-end ratio used is 36.00%. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

This uses the common 28/36 housing ratios. A lender can choose different limits.

A second pass changes only “Gross annual income”, from $120,000.00 to $132,000.00. Comfortable home price moves from $418,611.19 to $462,910.22. Nothing else on the form was edited, so the gap between those two results is the effect of that one field on House Affordability Calculator. If the gap is tiny, this page is not very sensitive to that entry. If the gap is large, get that entry from a document before you plan around the result.

What this page will not claim

House Affordability Calculator does not know your credit score, the county’s tax bill, or what an appraiser will say. Type the price, the loan, and the escrow you were quoted. Compare the payment with the loan estimate, and treat a small rounding difference as normal.

House Affordability Calculator stops at its own formula. When the next question is different, open Mortgage Calculator (Principal, interest, tax, insurance, PMI, and HOA in one payment.); Debt-to-Income Calculator (Front-end and back-end ratios, side by side.); Down Payment Calculator (The monthly amount that closes the gap.). Do not add those results to this one as if they were the same kind of dollar.

Check the result before you use it

Start on House Affordability Calculator by reading the labels, not the headline. The opening labels are Gross annual income ($120,000.00), Other monthly debt payments ($450.00), Down payment available ($60,000.00), Expected interest rate (6.50%), Loan term (30), Housing ratio limit (28%), Total debt ratio limit (36%), Property tax per year ($4,800.00), Insurance per year ($1,600.00), HOA per month ($0.00). If a label is not the fact you have, the result cannot turn into that fact later. The illustration on the form lands on $418,611.19. When you press Calculate and see that same figure, the button and this explanation are using one formula.

Change one field at a time. Write down the headline, edit a single line, and press Calculate again. A large jump means that line carries the result. A line that does not move is a line the formula ignores, which is a reason to confirm you opened the right page. House Affordability Calculator is built for one job: A price that fits income and the debts you already have. The description on the page says the same thing in a sentence: Turn income, debts, and a down payment into a home price using housing-ratio limits you can edit.

When the paperwork disagrees

Then hold the headline next to a source outside the site. That source might be a loan estimate, an account statement, a pay stub, or the public limit named in the methodology. A few cents of difference on a long schedule is ordinary rounding. A different rate, a fee you never typed, or a tax the form does not ask for is not rounding. Correct the input. Do not average the page with the paperwork.

When the outside source still disagrees, House Affordability Calculator has reached the edge of what it will claim. It will not phone a lender, pull a county record, or apply a credit you left blank. Send the calculator name, every input, and the result you expected through the contact page if you think the formula itself is wrong. Until that is settled, read $418,611.19 as the output of the fields above and nothing else.

FAQs