How to calculate affordability
Budget = min(28% × monthly income, 36% × monthly income − debts) Home price = (budget − fixed monthly ownership costs + down payment × monthly loan factor) ÷ (monthly loan factor + annual ownership-cost percentages ÷ 12) If no loan is needed, only ownership costs limit the cash purchase.
Worked example. You can afford a home up to: $358,300.
Example inputs — Annual income: $100,000; Monthly debts: $500; Down payment: $60,000; Interest rate: 6.5%; Loan term: 30 years; Entered as: %; Property tax yearly: 1.1%; Entered as: %; Home insurance yearly: 0.4%; Entered as: %; HOA yearly: 0%. Starting values are illustrative.
From George Guju, founder of Calculyn · Educational calculator guidance, not professional advice.
How it works
This planning model uses the lower of 28% of gross monthly income and 36% minus monthly debts as the housing budget. The estimated price includes property tax, insurance and HOA, each entered as dollars or an annual percentage of home price. Annual dollar bills are divided by 12; HOA dollars are monthly. It excludes PMI and closing costs; verify those separately for a specific property.
Using the affordability estimate
Home affordability is a budget question before it is a loan-approval question. This calculator uses income, existing debt, a down payment and a modeled interest rate to estimate a price supported by its housing-budget assumptions. A larger number is not automatically a better target: your personal living costs, cash reserves and tolerance for payment changes matter too.
Step-by-step inputs
- Annual income. Replace the starting value with your own, keeping the displayed unit and period. Starting example: $100,000 .
- Monthly debts. Replace the starting value with your own, keeping the displayed unit and period. Starting example: $500 .
- Down payment. Replace the starting value with your own, keeping the displayed unit and period. Starting example: $60,000 .
- Interest rate. Replace the starting value with your own, keeping the displayed unit and period. Starting example: 6.5% .
- Entered as. Replace the starting value with your own, keeping the displayed unit and period. Starting example: % .
- Property tax yearly. Replace the starting value with your own, keeping the displayed unit and period. Starting example: 1.1% .
- Entered as. Replace the starting value with your own, keeping the displayed unit and period. Starting example: % .
- Home insurance yearly. Replace the starting value with your own, keeping the displayed unit and period. Starting example: 0.4% .
- Entered as. Replace the starting value with your own, keeping the displayed unit and period. Starting example: % .
- HOA yearly. Replace the starting value with your own, keeping the displayed unit and period. Starting example: 0% .
Worked example with the starting values
Using the starting inputs, the estimate is You can afford a home up to: $358,300 .
- Monthly housing budget
- $2,333
- Principal & interest monthly
- $1,885
- Property tax monthly
- $328
- Home insurance monthly
- $119
- HOA monthly
- $0
Compare interest rate scenarios
All other inputs stay at their starting values. These are modeled comparisons, not quotes, predictions or individual recommendations.
| Interest rate | You can afford a home up to |
|---|---|
| 5.5% | $385,977 |
| 6.5% | $358,300 |
| 7.5% | $333,998 |
Make a useful comparison
Enter annual gross income and recurring monthly debts using the periods named in the fields. A yearly debt total entered into a monthly field can dramatically reduce the modeled affordable price. Include obligations you will still have after buying, rather than assuming they disappear at closing.
The calculation uses the lower of its housing and total-debt budget limits and includes your property tax, insurance and HOA. Each cost can use an annual percentage of home price or dollars: tax and insurance dollars are yearly, HOA dollars are monthly. ZIP lookup suggests an editable 2020–2024 Census-area tax proxy, not an exact bill or current local tax schedule. Check the property's assessment and insurance quote, especially after a sale.
After finding a price range, open the mortgage calculator with a specific home and realistic local taxes, insurance, HOA and PMI. Then compare that payment with your take-home budget and the cash you need for the down payment and closing.
Common mistakes to avoid
- The result is not lender approval. Loan programs, credit history, documented income, assets and property details can change underwriting decisions.
- A down payment uses cash that is no longer available for emergencies or repairs. Keep a separate reserve instead of entering every dollar of savings as money available for closing.
- Fixed percentage rules do not know your childcare, healthcare, transport or retirement-saving needs. A payment can satisfy a ratio while still leaving too little for your actual household.
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Assumptions & limitations
- Fixed interest rate for the full term.
- Excludes closing costs, points and rate changes.
- Property tax and insurance are treated as steady yearly amounts.
Formula and assumptions reviewed October 2026 by the Calculyn team. How we build our calculators
Frequently asked questions
How much house can I afford on my salary?
This model uses the smaller of 28% of gross monthly income and 36% minus existing monthly debts as a housing budget. It includes your property tax, insurance and HOA as dollars or annual percentages of home price. ZIP tax estimates are historical Census-area proxies that you can override. Actual approval and household affordability can differ.
Is a $50,000 salary enough to buy a house?
It depends on local prices, debts, down payment, rates and recurring costs. Enter $50,000 annual gross income and your own debts and down payment; the resulting planning price is not a lender approval or a universal salary threshold.
What is the 28/36 rule for home affordability?
It is a guideline limiting housing costs to 28% of gross income and total debt payments to 36%. This calculator takes the lower housing budget from those two tests. Loan programs can use different limits.
How much should I put down on a home?
Compare loan-program requirements, monthly payments, mortgage insurance and the cash left after closing. A larger down payment lowers borrowing but leaves less liquidity; 20% is not required for every mortgage.
What credit score do I need for a mortgage?
An affordability estimate does not assess your credit profile. Minimum scores and underwriting rules depend on lender and loan program. Confirm eligibility and actual rates before treating a modeled home price as your buying limit.
Should I buy a house now or wait?
Compare expected housing costs, likely time in the home, income stability and cash reserves. The calculator cannot predict future prices or interest rates. Use rent-versus-buy scenarios instead of treating a price estimate as a timing recommendation.
How much emergency savings should I keep after buying a home?
Keep a reserve based on essential spending, income reliability and potential repairs. Three to six months of essential costs is a common starting guideline, not a required minimum; include the new mortgage and ownership costs.
Is the price a guaranteed borrowing limit?
No. It follows the calculator's stated planning assumptions. A lender's assessment and your household budget can support a different amount.
What should I do after getting a price estimate?
Model the full payment for a specific property, budget upfront costs, and check the remaining monthly cash against your real expenses.