🏠 House Affordability Calculator
Determine your maximum affordable home price and mortgage payment based on standard debt-to-income (DTI) rules.
What is the House Affordability Calculator?
This tool helps you estimate the **maximum mortgage payment** and the **highest house price** you can realistically afford to purchase, based on your current income and existing debts. It is based on the core underwriting rules used by nearly all banks and lenders.
Why You Need This Tool and Its Purpose
The purpose of this calculator is to provide a sensible, lender-approved starting point before you begin house hunting. It helps you:
- **Prevent Overextending:** Determine a safe monthly payment that fits within your budget, preventing the financial stress of "house poor" syndrome.
- **Set Realistic Expectations:** Quickly find the maximum purchase price you can target, saving time by filtering out homes outside your financial reach.
- **Understand Lending Rules:** Clarify how lenders view your finances using standard **Debt-to-Income (DTI) ratios**.
How This Calculator Works (The 28/36 Rule)
The calculator uses the common **28/36 DTI Rule** to establish your limits:
- **Front-End Limit (28% Rule):** Your total monthly housing payment, known as PITI (Principal, Interest, Taxes, Insurance), should not exceed $28\%$ of your gross monthly income. This yields the **Maximum PITI Payment**.
- **Back-End Limit (36% Rule):** Your total monthly debt obligations (PITI + Car Loans + Credit Cards + Student Loans) should not exceed $36\%$ of your gross monthly income.