Mortgage Affordability Calculator

Understanding how much house you can afford is a crucial first step in the home-buying process. A mortgage affordability calculator helps you estimate the maximum loan amount you might qualify for, based on your income, debts, and estimated interest rates. This tool can give you a realistic budget for your home search and prevent you from overextending yourself financially.

When calculating affordability, lenders typically look at your Debt-to-Income Ratio (DTI). There are generally two DTI ratios considered:

Front-end DTI (Housing Ratio): This ratio compares your potential monthly housing expenses (principal, interest, property taxes, homeowners insurance, and any HOA fees) to your gross monthly income. Lenders often prefer this to be no more than 28%.
Back-end DTI (Total Debt Ratio): This ratio compares all your monthly debt obligations (including housing expenses, credit card payments, student loans, car loans, etc.) to your gross monthly income. Lenders often prefer this to be no more than 36% to 43%, though it can vary.

Our calculator focuses on estimating your maximum loan amount by considering your income and existing debts, which indirectly relates to the back-end DTI. It's important to remember that this is an estimate, and your actual mortgage approval will depend on a lender's specific underwriting criteria, credit score, down payment, and other factors.