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How this affordability calculator works

This affordability calculator estimates how much home you may be able to afford based on your income, monthly debts, down payment, and expected housing costs. It uses common debt-to-income (DTI) guidelines to calculate a comfortable price range and an estimated monthly payment.

What is debt-to-income (DTI)?

Debt-to-income ratio compares your total monthly debt payments to your gross monthly income. Lenders use this metric to evaluate how much additional debt you can reasonably take on. Lower DTI ratios generally indicate stronger affordability and lower financial risk.

Understanding affordability ranges

This calculator shows conservative, target, and aggressive affordability levels. A conservative range may feel more comfortable long term, while an aggressive range may stretch your budget. Choosing the right range depends on your financial goals, lifestyle, and risk tolerance.

Why total monthly cost matters

Your total housing cost includes more than just the loan payment. Property taxes, insurance, PMI, and HOA dues can significantly increase your monthly obligation. This calculator includes those costs so you can evaluate affordability more realistically.

Affordability and mortgage rate context

Home affordability is directly influenced by current mortgage rates. Even small changes in rates can significantly impact your monthly payment and the home price you can afford. Compare your scenario with the 30-year mortgage rate and 15-year mortgage rate to understand how borrowing costs affect affordability.

Mortgage rates are closely tied to the 10-year Treasury yield , which acts as a key benchmark for long-term interest rates. When Treasury yields rise, affordability typically decreases as mortgage rates increase.

To see the full picture, visit the mortgage rates today homepage or explore the mortgage spread to understand how lender pricing compares to Treasury benchmarks.

Affordability Calculator FAQ

How much house can I afford?

How much house you can afford depends on your income, monthly debts, interest rate, and down payment. This calculator uses common debt-to-income guidelines to estimate a price range that may fit your financial situation.

What is a good debt-to-income (DTI) ratio?

Many lenders consider a total DTI ratio of around 36% to be a reasonable target, while up to 43% may be acceptable in some cases. Lower DTI ratios generally indicate more comfortable affordability and lower financial risk.

Why are there different affordability ranges?

This calculator provides conservative, target, and aggressive affordability estimates. A conservative range may leave more room in your budget, while an aggressive range may stretch your finances. Choosing the right level depends on your comfort and long-term financial goals.

What costs are included in affordability?

Affordability includes more than just the loan payment. Property taxes, homeowners insurance, PMI, and HOA dues all contribute to your total monthly housing cost. This calculator includes those factors to give a more realistic estimate.