How to use this mortgage affordability calculator
Choose Estimate my affordability when you want to model one home-buying scenario. Enter your gross household income, recurring monthly debt obligations, available cash for the down payment and closing costs, down payment percentage, mortgage interest rate, loan term, and housing-cost assumptions.
You can also enter the front-end housing ratio and back-end debt-to-income ratio you want the calculator to use. These are planning assumptions rather than guarantees of what a lender will approve.
Choose Compare two affordability scenarios when you want to see how changing financing or debt assumptions affects the estimated maximum home price for the same household.
In comparison mode, household income, available cash, property-tax assumptions, homeowners insurance, HOA dues, and ratio targets remain shared. Each scenario can independently use a different recurring debt amount, down payment percentage, mortgage rate, term, monthly mortgage insurance, and estimated closing costs.
Understanding your affordability estimate
The estimated maximum home price is a planning estimate based on the income, recurring debts, available cash, down payment, mortgage terms, and housing-cost assumptions you enter.
The calculator also identifies the binding constraint, which helps show whether the estimate is being limited more by monthly affordability or by the amount of cash available for the purchase.
The results include the estimated maximum loan amount, monthly housing payment at the estimated maximum price, down payment, upfront cash used, and any available cash remaining.
What can affect your estimated home affordability
Income and recurring debt
Your gross household income and recurring monthly debt obligations both influence how much housing cost may fit within the affordability ratios you enter.
Recurring debt can include required payments on obligations such as car loans, student loans, personal loans, or credit cards. Higher required debt payments can reduce the amount of monthly income available for housing under the assumptions used in the calculator.
Front-end and back-end ratios
The calculator lets you enter a front-end housing ratio and a back-end debt-to-income ratio as planning assumptions.
The front-end ratio focuses on housing costs relative to gross household income, while the back-end ratio also considers recurring monthly debts.
These ratios can help you test different affordability scenarios, but they should not be treated as universal lender approval standards.
Available cash and down payment
The amount of cash you are prepared to use for the purchase can also affect the estimated maximum home price.
Available cash may need to cover both the down payment and the closing costs you enter. A larger down payment can reduce the amount that needs to be financed, but it also requires more money upfront.
Closing costs are treated as upfront costs rather than part of the modeled mortgage balance.
If you want to keep part of your savings outside the transaction for emergencies, reserves, or other needs, enter only the amount you are comfortable making available for the home purchase.
Property tax and other housing costs
Property taxes, homeowners insurance, HOA dues, and mortgage insurance can all increase the monthly cost of owning a home and may therefore affect the affordability estimate.
The property-tax field is entered as an estimated annual percentage of the home price. Homeowners insurance, HOA dues, and mortgage insurance are based on the amounts you provide.
These costs can vary significantly by property, location, insurer, loan program, and other factors, so use estimates that are appropriate for the home or scenario you are considering.
Mortgage rate, term, and down payment
Your mortgage interest rate, loan term, and down payment percentage can materially change the estimated monthly housing cost and the amount of home that may fit the scenario.
A larger down payment generally reduces the amount financed. A different mortgage rate or loan term can change the monthly principal-and-interest payment.
Mortgage insurance is not automatically estimated. If it applies to the scenario you are evaluating, enter a monthly amount based on an estimate or quote.
Understanding the binding constraint
An affordability estimate can be limited by different parts of your household and financing picture.
An income or DTI constraint means monthly affordability is the main factor limiting the estimate under the income, debt, and ratio assumptions you entered.
A cash or down-payment constraint means the amount of available cash for the down payment and closing costs is the main factor limiting the estimated home price.
Knowing which constraint is binding can make the results easier to interpret because it highlights the part of the scenario that is currently restricting the estimate.
Comparing affordability scenarios
Comparison mode can help you see how changing selected assumptions affects the affordability estimate while keeping the household's core assumptions consistent.
For example, you can compare the effect of reducing recurring monthly debt, changing the down payment percentage, testing a different mortgage rate, choosing another term, entering a different mortgage-insurance amount, or changing estimated closing costs.
Each scenario shows its own estimated maximum home price, maximum loan amount, monthly housing payment, upfront cash requirement, affordability ratios, and binding constraint.
The comparison results also make it easier to see how changes in financing assumptions affect the estimated maximum home price, monthly housing cost, and cash needed upfront.
Why paying off debt can affect home affordability
Recurring monthly debt affects how much of your income may be available for housing under the debt-to-income assumptions you enter.
Reducing a required monthly debt payment may increase the amount of monthly housing cost that fits the scenario, but it does not guarantee that the estimated maximum home price will rise by a particular amount.
Available cash, the front-end housing ratio, mortgage rate, down payment, and other costs may still limit the estimate.
Comparison mode can help you see whether reducing debt meaningfully changes the affordability picture under the assumptions you enter.
Important assumptions and limitations
This calculator is a planning estimate, not a mortgage preapproval, underwriting decision, or guarantee that a lender will approve a particular home price or loan amount.
The front-end and back-end ratios are the percentages you enter. Actual lender standards can vary by loan program, borrower, lender, and other underwriting factors.
The calculation does not evaluate credit history, credit score, income documentation, employment history, lender reserve requirements, property eligibility, loan-program rules, or other factors that may affect mortgage approval.
Actual property taxes, homeowners insurance, HOA assessments, mortgage insurance, closing costs, points, prepaid items, and other transaction costs can differ from the assumptions entered here.
Homeowners insurance, HOA dues, and mortgage insurance are based on the amounts you enter and may change in real life as costs, coverage, or loan circumstances change.
Mortgage insurance is not automatically priced or cancelled by this calculator.
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Explore the factors that affect home affordability
MarketReview's Mortgage section covers down payments, mortgage costs, loan terms, home financing, and other considerations that can help put an affordability estimate into a broader home-buying context.