How does this calculator decide how much house I can afford?

It applies two debt-to-income (DTI) limits to your gross monthly income. The front-end cap limits how much can go to housing alone; the back-end cap limits housing plus your existing debts. Whichever leaves the smaller housing budget wins, and that budget is converted into a maximum loan and home price.

What is the 28/36 rule?

A common lending guideline: spend no more than 28% of gross monthly income on housing (front-end) and no more than 36% on total debt including housing (back-end). Those are the default DTI values here, but you can change both to match a specific lender or country.

How is the maximum loan calculated from a monthly budget?

The tool inverts the standard amortising-loan formula. Given an allowable monthly principal-and-interest payment M, the loan equals M multiplied by (1 minus (1 plus r) to the power of minus n) divided by r, where r is the monthly rate and n is the number of months.

Why do property tax and insurance lower my max price?

Tax, insurance and HOA charges are part of your monthly housing cost, so they compete with the mortgage payment for the same DTI budget. The calculator solves iteratively because tax and insurance scale with the home value, which in turn depends on the loan.

Does a bigger deposit increase the home price I can afford?

Yes. The maximum loan is set by your income and DTI limits, then your deposit is added on top to get the home price. A larger down payment also lowers your loan-to-value, which can unlock better interest rates.

Is my financial information kept private?

Completely. Every figure is calculated inside your browser and saved only in this browser local storage. Nothing is uploaded, and the page makes no network calls.

Home Affordability Calculator

A home affordability calculator answers the question every buyer starts with: how much house can I actually afford? Instead of guessing from a single rule of thumb, it turns your real numbers — gross income, existing monthly debts, deposit, interest rate and loan term — into a maximum home price, the loan behind it, and a full monthly housing-cost breakdown. It is built for anyone sizing a budget before house-hunting, comparing what a rate change does to their ceiling, or sanity-checking a lender’s pre-approval figure.

How it works

Lenders rarely approve you on income alone — they cap your borrowing with debt-to-income (DTI) ratios. This tool applies two of them. The front-end ratio limits how much of your gross monthly income can go to housing by itself. The back-end ratio limits housing plus your existing debt payments. Whichever rule leaves the smaller monthly housing budget is the one that binds, and the calculator tells you which.

That binding housing budget is then split. Fixed costs like an HOA or service charge come off the top. Value-scaled costs — property tax and insurance, entered as a percentage of the home value per year — are subtracted next. Because those costs depend on the home value, which depends on the loan, the tool solves the relationship iteratively until it converges. The payment that remains is what services the mortgage, and the maximum loan is recovered by inverting the amortising-loan formula.

Formula note

The monthly principal-and-interest payment for a loan is M = P · r(1+r)^n / ((1+r)^n − 1), where P is the loan, r the monthly rate (annual rate ÷ 12) and n the number of months. To find the largest loan a payment can support, the formula is inverted: P = M · (1 − (1+r)^-n) / r. When the rate is zero the loan is simply M × n.

Worked example

Take a household earning 90,000 a year, with 400 of existing monthly debt payments and a deposit of 40,000, looking at a 5.5% rate over 30 years and the default 28/36 DTI caps. Gross monthly income is 7,500. The front-end cap allows 2,100 for housing; the back-end cap allows 36% × 7,500 − 400 = 2,300. The front-end rule binds, so the housing budget is 2,100 per month.

Carving out a small allowance for insurance and converting the rest with the inverted formula gives a maximum loan of roughly 355,000. Add the 40,000 deposit and the maximum home price lands near 395,000, at about 90% loan-to-value, with a total monthly housing cost close to the 2,100 ceiling. Drop the rate to 4.5% and the same income supports a noticeably higher price — the chart and breakdown update instantly so you can see exactly where each pound goes.

Every figure is computed in your browser. No income, debt or deposit number is ever uploaded.