State Income Tax Calculator

Estimate how much house you can realistically afford based on your income and debts.

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Estimated Home Budget

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Max Loan Amount —

Monthly P&I Payment —

How Much House Can I Afford?

Determining your home buying budget is the most critical first step in the real estate journey. While banks often use complex algorithms, our Home Affordability Calculator uses the industry-standard Debt-to-Income (DTI) ratio to estimate what a lender might reasonably approve.

The 28/36 Rule

Most lenders follow the 28/36 rule. This guideline suggests that your total housing expenses (mortgage, taxes, and insurance) should not exceed 28% of your gross monthly income, and your total debt obligations (including the new mortgage) should not exceed 36% of your gross monthly income. Our calculator uses a conservative 36% DTI threshold to ensure you remain "house-comfortable" rather than "house-poor."

Key Factors Impacting Affordability

• Gross Annual Income: This is your total income before taxes. Lenders look at stability and consistency.
• Monthly Debt: This includes car loans, student loans, and minimum credit card payments. Higher existing debt lowers your mortgage capacity.
• Down Payment: The more cash you bring to the table, the higher the home price you can target without increasing your loan amount.
• Interest Rates: Even a 1% change in interest rates can swing your buying power by tens of thousands of dollars.

Realistic Example

If you earn $80,000 per year with $500 in monthly debts and have a $30,000 down payment, at a 6.5% interest rate, you could likely afford a home priced around $325,000. This assumes a 30-year fixed mortgage and standard property tax estimates.

function calculateAffordability() { var annualIncome = parseFloat(document.getElementById('annualIncome').value); var monthlyDebts = parseFloat(document.getElementById('monthlyDebts').value); var downPayment = parseFloat(document.getElementById('downPayment').value); var interestRate = parseFloat(document.getElementById('interestRate').value); var loanTerm = parseFloat(document.getElementById('loanTerm').value); var taxInsurance = parseFloat(document.getElementById('taxInsurance').value); if (isNaN(annualIncome) || isNaN(monthlyDebts) || isNaN(downPayment) || isNaN(interestRate)) { alert("Please enter valid numbers in all fields."); return; } var monthlyGross = annualIncome / 12; var monthlyTaxIns = taxInsurance / 12; // Using conservative 36% DTI Limit var totalAllowedMonthlyDebt = monthlyGross * 0.36; var availableForPI = totalAllowedMonthlyDebt – monthlyDebts – monthlyTaxIns; if (availableForPI <= 0) { document.getElementById('affordabilityResult').style.display = "block"; document.getElementById('totalPrice').innerText = "Ineligible"; document.getElementById('maxLoan').innerText = "$0"; document.getElementById('monthlyPI').innerText = "$0"; return; } var monthlyRate = (interestRate / 100) / 12; var totalMonths = loanTerm * 12; // Present Value of Annuity Formula: P = PMT * [(1 – (1 + r)^-n) / r] var loanAmount = availableForPI * ((1 – Math.pow(1 + monthlyRate, -totalMonths)) / monthlyRate); var totalPrice = loanAmount + downPayment; // Formatting var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', maximumFractionDigits: 0 }); document.getElementById('affordabilityResult').style.display = "block"; document.getElementById('totalPrice').innerText = formatter.format(totalPrice); document.getElementById('maxLoan').innerText = formatter.format(loanAmount); document.getElementById('monthlyPI').innerText = formatter.format(availableForPI); }