CalcHorizon

Mortgage Affordability Calculator (Budget Based)

Determine how much home you can afford based on your monthly budget.

Budget-Based Affordability Calculator

Calculate how much home you can afford based on a fixed monthly budget for housing costs.

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You can afford a house up to

$4,532,614

within which $3,626,088 is the loan and $906,523 is the down payment.

Financial Summary

You can borrow$3,626,088
Total price of the house$4,532,614
Down payment$906,523
Estimated closing cost (one-time, assume 3%)$135,978
Total one-time payment at closing$1,042,501

Monthly & Annual Costs

Monthly mortgage payment$21,780
Annual property tax$67,989
Annual insurance cost$22,663
Annual maintenance cost$67,989
Total monthly cost on the house$35,000

Explore Our Guides

Income Affordability Guide →

Learn how lenders use your salary to determine your maximum loan amount.

Monthly Budget Guide →

Plan your mortgage based on a comfortable monthly EMI that fits your lifestyle.

How Much House Can You Really Afford?

Determining your home buying budget is the most critical first step in the mortgage process. Our mortgage affordability calculator helps you approach this from two different angles: your annual income or your monthly comfort level.

Understanding the 28/36 Rule

Most lenders use the 28/36 rule to determine how much they're willing to lend you. This means your total housing costs shouldn't exceed 28% of your gross monthly income, and your total debt payments (including the new mortgage) shouldn't exceed 36%.

Factors That Impact Affordability

  • Interest Rates: Even a 0.5% change in rates can swing your buying power by tens of thousands of dollars.
  • Down Payment: A larger down payment reduces your loan amount and monthly payment, potentially helping you avoid PMI.
  • Credit Score: Higher scores unlock lower interest rates, directly increasing the loan amount you can afford.
  • Debt-to-Income (DTI): Lowering existing debts like car loans or student loans increases what's left for a mortgage.

Frequently Asked Questions

What is a good debt-to-income ratio for a mortgage?

Ideally, your back-end DTI (all debts including mortgage) should be 36% or lower. However, some loan programs like FHA allow up to 43% or even 50% in certain cases.

How does the down payment affect my affordability?

The more you put down, the less you need to borrow. This lowers your monthly principal and interest payment, allowing you to afford a higher-priced home with the same monthly budget.