How much home you can afford

The price in one paragraph

Affordability starts from income, not from a listing. The home affordability calculator caps the housing payment at the lower of two ratios you can move, subtracts the tax and insurance you type, and turns what is left into a loan with the same fixed-rate formula as the payment calculator. The price adds your down payment.

When to use

Use it before you fall in love with a price. It answers “what payment fits this income?” The mortgage payment guide answers the next question, once you already have a loan amount. The amortization guide splits that payment. The refinance guide is for a loan you already owe.

The formula in plain English

Housing cap = min(income × front, income × back − other debts)
P&I = housing cap − tax − insurance
Price = loan + down payment

The loan is the fixed-rate payment formula solved for the amount. The monthly rate is the annual rate divided by 12. A common teaching pair in the United States is 28% of gross income for housing and 36% for housing plus other debts. Portuguese and Spanish pages start from different teaching defaults. The formula does not change. The sliders do.

Tax and insurance are flat amounts. They are not looked up from an address, and they do not grow with the price inside this model.

A worked example

Gross income of 5,000, no other debts, 20,000 down, a 0% rate, 30 years, 28% front-end, and 36% back-end. The housing cap is 1,400. With no tax or insurance the loan is 1,400 × 360 = 504,000 and the price is 524,000. Add other debts and the back-end limit can be the one that binds.

How to read the result

The maximum price is a ceiling under the ratios you set, not an approval. The card labeled as the binding limit tells you which ratio ran out of room. If debts already use the back-end ratio, the loan is zero and the price is only the cash you put down. The chart keeps every input except the rate and walks a few points around Scenario A.

Common mistakes

Using net pay when the ratios are defined on gross income.

Ignoring debts you already pay. The back-end ratio exists for that.

Treating the price as a lender decision. Credit, reserves, and the lender’s own rules sit outside this page.

FAQ

Why do 28% and 36% show up?

They are a common teaching pair. The sliders move. Other locales start from their own teaching defaults and use the same math.

Does the down payment reduce the loan?

Yes. The loan is what the payment can support. The price is that loan plus the cash you put down.

Where do taxes and insurance go?

They reduce the principal and interest the payment can cover. They are not estimated from an address.

How is this different from the payment calculator?

This page solves for the loan. The payment calculator starts from a loan you already chose and prices the installment. The amortization schedule lists each month. The refinance calculator compares a new loan with a balance you still owe.

Can I fill the rate from a market average?

Yes. The 30-year average fills the mortgage rate from the Freddie Mac PMMS, and you can still edit the field. The link stores the number you apply. Indicative rate, not a recommendation.

Is this financial advice?

No. It is an educational ceiling that runs in your browser. A lender’s approval is a different document.

Related guides

• How a mortgage payment is calculated — principal and interest once the loan amount is known.
• How an amortization schedule is built — each month’s principal, interest, and balance.
• How refinance break-even works — closing costs against a loan you already have.
• How a savings goal is calculated — build the down payment before you stretch the price.
• How big an emergency fund should be — a reserve beside the housing payment.
• Inflation and real return — a long loan is a nominal payment. Prices around it still move.

Try it with your figures

Open the home affordability calculator, set income, other debts, and the down payment, then open the payment calculator with the loan this page produces. Share the URL to keep the same inputs.