Before you fall in love with a listing, it helps to know the honest ceiling on what you can borrow. This affordability calculator works backward from your income, existing debts, and down payment to estimate the maximum home price a lender is likely to approve — and, just as importantly, the price that leaves you comfortable rather than house-poor.
How lenders decide what you can afford
Most lenders lean on the 28/36 rule. The front-end ratio says your total monthly housing cost should stay under 28% of your gross monthly income. The back-end ratio says all your monthly debt payments combined — housing plus car loans, student loans, and credit card minimums — should stay under 36%. This calculator applies both limits and shows the more conservative of the two.
Why your debts matter so much
Every $200 car payment or $300 student loan bill reduces the mortgage payment you can qualify for dollar for dollar within that 36% ceiling. That is why paying down or paying off a small loan before applying can meaningfully raise your buying power, sometimes more than saving a larger down payment would.
A worked example
Imagine you earn $90,000 a year ($7,500 a month) with $500 in monthly debt payments. The 28% front-end limit allows about $2,100 for housing; the 36% back-end limit allows $2,700 total, minus your $500 in debts, leaving $2,200 for housing. The lender uses the lower figure, roughly $2,100. After taxes and insurance, that supports a loan around $270,000–$300,000 depending on your rate and down payment.
Smart ways to use this number
- Treat the maximum as a ceiling, not a target — borrowing less leaves room for emergencies and life changes.
- A larger down payment lowers your loan amount and can push you below the PMI threshold, freeing up monthly cash.
- Get pre-approved before shopping so sellers take your offer seriously and you know your real budget.
- Remember the calculator cannot see your lifestyle — factor in childcare, travel, and savings goals before maxing out.