🏦 Mortgage Affordability Calculator

Find out exactly how much house you can afford with our free Mortgage Affordability Calculator. Enter your income, debts, and loan details to get your maximum home price based on the 28/36 rule used by lenders.

Your total annual income before taxes
Annual income of co-borrower (if any)
Car loans, student loans, credit cards, etc.
Annual property tax as % of home value
Private Mortgage Insurance (if down payment < 20%)
Max % of income for housing (28% standard)
Max debt-to-income ratio (36% standard)

What Is Mortgage Affordability?

Mortgage affordability refers to how much home you can reasonably purchase based on your financial situation. Lenders use specific guidelines to determine whether you qualify for a mortgage and how large a loan they will approve. The most widely used standard is the 28/36 rule, which sets two critical thresholds:

  • Front-end ratio (28%): Your total monthly housing costs, including principal, interest, property taxes, homeowners insurance, PMI, and HOA fees, should not exceed 28% of your gross monthly income.
  • Back-end ratio (36%): Your total monthly debt obligations, including housing costs plus all other debts like car loans, student loans, and credit card minimum payments, should not exceed 36% of your gross monthly income.

Some loan programs, such as FHA loans, allow higher ratios (up to 31/43), and certain lenders may approve borrowers with DTI ratios up to 50% in specific circumstances. However, staying within the 28/36 guidelines provides a comfortable margin and reduces the risk of becoming house-poor.

How This Calculator Works

Our calculator uses an inverse mortgage formula to work backward from your income and debt limits to determine the maximum home price you can afford. Here is the step-by-step process:

  1. It calculates your maximum allowable monthly housing payment based on the housing ratio (default 28% of gross monthly income).
  2. It calculates the maximum total debt payment using the DTI ratio (default 36%) and subtracts your existing monthly debts.
  3. It takes the lower of these two amounts as your maximum housing budget.
  4. It subtracts fixed monthly costs (insurance and HOA) from this budget.
  5. Using the remaining amount, it solves for the maximum home price that would produce a mortgage payment (principal, interest, property tax, and PMI) fitting within your budget.

The result is rounded down to the nearest $1,000 for a conservative estimate. The calculator also runs five what-if scenarios automatically, showing how your affordability changes with different interest rates, down payments, and income levels.

Factors That Affect Your Mortgage Affordability

Income

Your gross annual income is the single most important factor. Higher income directly increases how much you can borrow. If you have a co-borrower, such as a spouse, their income is added to yours, which can significantly increase your purchasing power. Lenders verify income through pay stubs, tax returns, and W-2 forms, typically requiring a two-year employment history.

Existing Debts

Monthly debt payments reduce the amount available for housing. Common debts that lenders consider include auto loans, student loans, personal loans, credit card minimum payments, child support, and alimony. Paying down debts before applying for a mortgage can meaningfully increase the home price you can afford.

Interest Rate

The mortgage interest rate has a major impact on affordability. As of early 2026, 30-year fixed mortgage rates hover around 6.5% to 7%, which is significantly higher than the sub-3% rates seen in 2020 and 2021. Every 1% increase in rate reduces your purchasing power by roughly 10%. This calculator includes scenario comparisons so you can see the impact of rate changes instantly.

Down Payment

A larger down payment means a smaller loan, which reduces your monthly payment and may eliminate PMI (if you put 20% or more down). However, a smaller down payment lets you enter the market sooner. FHA loans allow as little as 3.5% down, while conventional loans often require 5% to 20%. Our calculator adjusts automatically based on your down payment percentage and applies PMI if below 20%.

Property Taxes

Property tax rates vary dramatically across the United States, from under 0.5% in Hawaii to over 2% in New Jersey and Illinois. Since property taxes are part of your monthly housing cost, higher tax rates reduce the home price you can afford. Our state and city-specific calculators pre-fill the correct local rate for more accurate results.

Homeowners Insurance

Annual homeowners insurance premiums depend on your location, home value, and coverage level. Coastal areas and regions prone to natural disasters (hurricanes, wildfires, tornadoes) typically have higher premiums. Florida homeowners may pay $4,000 to $5,000 or more annually, while the national average is around $1,500 to $2,000.

PMI (Private Mortgage Insurance)

If your down payment is less than 20%, lenders require PMI to protect themselves against default. PMI typically costs 0.3% to 1.5% of the original loan amount per year, added to your monthly payment. PMI can be removed once you reach 20% equity in your home, either through payments or appreciation.

Tips to Improve Your Mortgage Affordability

  • Pay down existing debt: Reducing your monthly obligations directly increases the amount available for housing costs.
  • Increase your income: A raise, side income, or adding a co-borrower can significantly boost purchasing power.
  • Improve your credit score: A higher score qualifies you for lower interest rates, which increases affordability. Aim for 740+ for the best rates.
  • Save a larger down payment: Putting 20% or more down eliminates PMI and reduces monthly costs.
  • Consider a longer loan term: A 30-year mortgage has lower monthly payments than a 15-year, though you pay more interest overall.
  • Shop in lower-tax areas: Property taxes can vary significantly even within the same metropolitan area.
  • Lock in your rate: When you find a favorable rate, lock it in to protect against increases during the closing process.

Current Market Context (2026)

The US housing market in 2026 continues to adjust to the higher interest rate environment. Mortgage rates for 30-year fixed loans remain in the 6% to 7% range, well above the historic lows of 2020-2021 but gradually stabilizing. Home prices have moderated in many markets but remain elevated in high-demand metros. Inventory is slowly improving as more sellers adjust expectations and new construction ramps up. For buyers, this means careful affordability planning is more important than ever. Use our calculator with the current rates to get a realistic picture of what you can afford before starting your home search.

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Frequently Asked Questions

How much house can I afford on a $75,000 salary?

With a $75,000 annual salary, 20% down payment, 6.5% interest rate, and minimal debts, you can typically afford a home in the $280,000 to $320,000 range. The exact amount depends on your debts, property taxes, insurance costs, and the ratios your lender uses. Use our calculator with your specific numbers for a precise estimate.

What is the 28/36 rule for mortgages?

The 28/36 rule states that you should spend no more than 28% of your gross monthly income on housing costs and no more than 36% on total debt payments (including housing). This guideline helps ensure you can comfortably afford your mortgage while maintaining a healthy financial balance for other expenses and savings.

Should I put 20% down on a house?

Putting 20% down eliminates PMI, gives you instant equity, and results in lower monthly payments. However, it is not always necessary. FHA loans require as little as 3.5% down, and many conventional loans accept 5% to 10%. The tradeoff is higher monthly costs due to PMI and a larger loan balance. Our calculator lets you compare scenarios with different down payment amounts.

How do interest rates affect how much I can afford?

Interest rates have a significant impact. At 5.5%, a buyer with $75,000 income might afford a $340,000 home. At 7.5%, the same buyer might only afford $280,000. Every percentage point change shifts affordability by roughly 10%. Check the scenario analysis in our results to see the exact impact for your situation.

What debts count toward my DTI ratio?

Lenders include all recurring monthly obligations: auto loans, student loans, personal loans, credit card minimum payments, child support, alimony, and any other installment debt. They do not typically count utilities, groceries, subscriptions, or insurance premiums (except homeowners insurance, which is part of housing cost).

Can I afford a house if my DTI is above 36%?

Some loan programs allow higher DTI ratios. FHA loans permit up to 43%, and some lenders approve DTIs up to 50% with compensating factors like excellent credit, large savings, or significant income growth potential. However, a higher DTI means tighter monthly budgets and less financial flexibility. Our calculator flags ratios above 36% as "Stretched" and above 43% as "Risky" to help you assess your comfort level.

Frequently Asked Questions

How much house can I afford on a $75,000 salary?
With a $75,000 annual salary, 20% down payment, 6.5% interest rate, and minimal debts, you can typically afford a home in the $280,000 to $320,000 range. The exact amount depends on your debts, property taxes, insurance costs, and the ratios your lender uses.
What is the 28/36 rule for mortgages?
The 28/36 rule states that you should spend no more than 28% of your gross monthly income on housing costs and no more than 36% on total debt payments including housing. This guideline helps ensure you can comfortably afford your mortgage.
Should I put 20% down on a house?
Putting 20% down eliminates PMI, gives you instant equity, and results in lower monthly payments. However, FHA loans require as little as 3.5% down. The tradeoff is higher monthly costs due to PMI and a larger loan balance.
How do interest rates affect how much I can afford?
Every percentage point change in interest rate shifts affordability by roughly 10%. At 5.5%, a buyer with $75,000 income might afford $340,000. At 7.5%, the same buyer might only afford $280,000.
What debts count toward my DTI ratio?
Lenders include all recurring monthly obligations: auto loans, student loans, personal loans, credit card minimum payments, child support, and alimony. Utilities, groceries, and subscriptions are not counted.
Can I afford a house if my DTI is above 36%?
Some loan programs allow higher DTI ratios. FHA loans permit up to 43%, and some lenders approve DTIs up to 50% with compensating factors. However, higher DTI means tighter budgets and less financial flexibility.