Home Affordability Calculator
Estimate how much home you can afford based on your income, debt, down payment, and mortgage terms.
Introduction
Welcome to the Home Affordability Calculator! This tool helps you determine the price of a home you can afford by considering your annual income, monthly debt, down payment, and mortgage terms like interest rate and loan duration.
How to Use
- Enter your total annual income from all sources.
- Enter your monthly debt payments, such as loans or credit card bills.
- Input the down payment amount you can afford for the home.
- Specify the expected mortgage interest rate and loan term in years.
- Click "Calculate Affordability" to see the estimated home price you can afford and monthly payment.
- Review the summary and notes in the result section for insights on your affordability.
- Click "Reset" to clear the form and start over.
- Click "Save Entries" to store your calculations locally.
Understanding Home Affordability
This calculator estimates how much home you can afford using standard affordability ratios like the 28/36 rule, where housing costs should not exceed 28% of monthly income, and total debt should not exceed 36%. Key points include:
- The affordable home price is based on the maximum monthly payment you can make after accounting for debt, translated into a loan amount plus your down payment.
- The monthly payment is calculated using the loan amount, interest rate, and loan term.
These calculations are estimates and do not account for additional costs like property taxes, insurance, or varying lender criteria.
FAQs
What is the 28/36 rule?
It’s a guideline where housing costs should be no more than 28% of your gross monthly income, and total debt payments (including housing) should be no more than 36%.
Does this include taxes and insurance?
No, this calculator focuses on principal and interest. Additional costs like property taxes and insurance may affect affordability and should be considered separately.
How can I afford a more expensive home?
Increase your income, reduce monthly debt, save for a larger down payment, or look for lower interest rates or longer loan terms to lower monthly payments.
About This Calculator
Built by xAI, this Home Affordability Calculator provides a simple way to estimate home affordability for educational purposes. For detailed financial planning or mortgage advice, consult a financial advisor or lender.