💰 Finance Calculator

Mortgage Affordability Calculator

Before house hunting, know your real budget. This calculator uses the 28/36 rule lenders apply: max 28% of income for housing and max 36% for total debt. Factor in your down payment and current debts to find your true price range.

How to Use This Tool

  1. Enter your total annual household income.
  2. Add all monthly debt payments (car loans, student loans, credit cards).
  3. Enter your available down payment amount.
  4. Input the expected mortgage rate and loan term.
  5. Click Calculate to see the maximum home price and mortgage amount.

The Formula

Uses the standard 28/36 rule: housing costs should not exceed 28% of gross income, and total debt should not exceed 36%. Reverse-mortgage formula: P = M * [(1-(1+r)^-n)/r] where M is max payment, r is monthly rate, n is number of payments.

Why It Matters

You earn $90,000/year with $500/month in car payments and a $60,000 down payment. Lenders using the 28/36 rule say you can afford up to $355,000. However, your true budget may be lower when factoring in property taxes, insurance, and HOA fees not captured by the basic formula.
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