Skip to content

House Affordability Calculator

Financial Profile

Car loans, credit cards, student loans, etc.

Loan Details

Advertisement

How to use the House Affordability: The 28/36 Rule

The EzCalcy House Affordability Calculator helps you determine a realistic budget for your new home. Instead of guessing, we use the same debt-to-income (DTI) ratios that mortgage lenders use to qualify you for a loan. However, qualifying for a loan doesn't mean you can afford it comfortably.

🛠️ Stress Test Your Budget

Can you still pay the mortgage if one spouse loses a job? Or if you have a medical emergency? Don't max out your DTI limit.

🏦 Closing Costs Buffer

Remember to set aside 2-5% of the home price for closing costs (appraisal, title, origination), separate from your down payment.

The Formula

Max Monthly Payment = Income × 0.28

What Affects Affordability?

  • Interest Rate: Higher rates reduce your buying power significantly.
  • Down Payment: A larger down payment lowers your monthly payment and allows you to buy a more expensive home.
  • Existing Debt: Clearing car loans or credit card debt frees up room in your DTI for a mortgage.

Frequently Asked Questions (FAQ)

Does this include property tax?

Affordability isn't just the mortgage. Our calculator estimates property taxes and insurance (PITI) to give you a realistic 'out-the-door' monthly cost.

What is the 28/36 rule?

Lenders often use this rule: spend no more than 28% of your gross monthly income on housing expenses, and no more than 36% on total debt (housing + credit cards + other loans).

Can I qualify with a higher DTI?

Yes, FHA and VA loans often allow DTIs up to 45% or even 50% depending on your credit score and reserves.

How to use the Home Affordability & Budgeting

Determining how much house you can afford prevents you from becoming 'house poor.' Lenders use Debt-to-Income (DTI) ratios to decide your loan amount, but you should also consider your personal spending habits and savings goals.

The 28/36 Rule

A standard guideline: Spend no more than 28% of gross income on housing (PITI) and no more than 36% on total debt (Housing + Car + Cards).

Front-End vs Back-End Ratio

Front-end is just housing costs. Back-end includes all monthly debts. Lenders care most about the Back-end ratio.

The Formula

Max Debt = Gross Income × DTI limit

What Affects Affordability?

  • Down Payment: A larger down payment lowers the loan amount and monthly payment, increasing your purchasing power.
  • Interest Rate: Lower rates significantly boost how much house you can buy for the same monthly payment.
  • Existing Debt: Paying off car loans or credit cards frees up room in your DTI ratio for a mortgage.

Common Questions

Does this include property tax?

Affordability isn't just the mortgage. Our calculator estimates property taxes and insurance (PITI) to give you a realistic 'out-the-door' monthly cost.

What is the 28/36 rule?

Lenders often use this rule: spend no more than 28% of your gross monthly income on housing expenses, and no more than 36% on total debt (housing + credit cards + other loans).

Can I qualify with a higher DTI?

Yes, FHA and VA loans often allow DTIs up to 45% or even 50% depending on your credit score and reserves.