Home affordability is a measure of how much house you can responsibly purchase given your income, existing debts, down payment, and the cost of financing. Lenders use two key debt-to-income (DTI) ratios to assess affordability: the front-end ratio (housing expenses as a percentage of gross income) and the back-end ratio (all debt payments as a percentage of gross income). Most conventional lenders prefer a front-end ratio below 28% and a back-end ratio below 36%.

Just because a lender approves you for a certain amount doesn't mean you should borrow that much. Responsible home buying means factoring in all costs of ownership — mortgage principal and interest, property taxes, homeowner's insurance, PMI if applicable, HOA fees, maintenance, and utilities — while still maintaining an emergency fund and saving for retirement.

Enter your gross annual or monthly income before taxes. Include all recurring monthly debt payments such as car loans, student loans, credit card minimum payments, and personal loans. Enter your available down payment and current mortgage interest rate, then select your preferred loan term. Optionally adjust the property tax rate and homeowner's insurance estimate for your target area.

The calculator shows the maximum home price you qualify for under lender guidelines, your estimated monthly payment breakdown, and how your DTI ratios compare to standard thresholds. Use the result as a ceiling, not a target — buying below your maximum affordability leaves financial room for life events and market changes.

Save at least 20% for a down payment to avoid PMI, which typically costs 0.5–1.5% of the loan amount annually. Get pre-approved before house hunting so you know your real budget and sellers take your offers seriously. Budget 1–2% of the home's value annually for maintenance and repairs — older homes often require more. Factor in closing costs of 2–5% of the purchase price, which must be paid upfront.

Keep your emergency fund intact separate from your down payment savings. Plan to stay in the home at least 5–7 years to recoup transaction costs through appreciation. Compare mortgage rates from at least 3–5 lenders — even a 0.25% rate difference saves thousands over the loan term. Consider total cost of homeownership, not just mortgage payment, when deciding what you can genuinely afford.