Home Affordability Calculator
Income and cash constrained home budget
Estimate a home price that fits both limits
Result
Calculation summary
Enter values to see the result
Live affordability preview
The lower price ceiling sets the estimate
- Monthly-budget price limit
- $392,482.78
- Available-cash price limit
- $543,478.26
- Estimated affordable home price
- $392,482.78
How to use this calculator
- 1Enter gross monthly income, recurring monthly debt, and the housing and total-DTI planning percentages you want to test.
- 2Enter available cash, the amount to retain as a reserve, down payment, closing costs, and mortgage terms.
- 3Add local estimates for property tax, insurance, maintenance, mortgage insurance, and association dues, then calculate the lower of the monthly and cash-based price limits.
Formula
Affordable home price = lower of monthly-budget price limit and available-cash price limit
The monthly limit reverses fixed mortgage payment and recurring ownership costs. The cash limit divides purchase cash after reserves by the combined down-payment and closing-cost percentages.
Calculation steps
- Calculate a housing-ratio budget and a total-DTI budget after recurring debt, then use the lower monthly amount.
- Subtract the selected cash reserve from available cash to obtain funds available for down payment and closing.
- Convert the fixed mortgage rate and term into a monthly payment per unit of home price.
- Add property tax, insurance, maintenance, mortgage insurance, and fixed HOA costs to the modeled monthly ownership cost.
- Solve the monthly and upfront-cash price ceilings independently and select the lower finite ceiling.
- Recalculate the complete monthly and cash breakdown at the estimated affordable price.
Worked example
With 10,000 gross monthly income, 800 of recurring debt, 30% and 36% planning ratios, 150,000 cash, a 25,000 reserve, 20% down, and 3% closing costs, the model compares the income-based ceiling with the cash-based ceiling instead of assuming either one is sufficient.
Assumptions
- The mortgage uses one fixed nominal annual rate divided into monthly periods for the full selected term.
- Housing and total-DTI percentages are user-entered planning limits, not universal approval standards.
- Maintenance is included in the personal monthly ownership budget but excluded from the displayed lender-style housing payment and DTI ratios.
- Property tax, homeowners insurance, maintenance, and mortgage insurance remain constant percentages of the estimated purchase price or loan amount.
- The selected cash reserve is preserved and closing costs are estimated as a percentage of purchase price.
- Credit score, underwriting rules, loan limits, income documentation, utilities, tax effects, moving, furnishings, and renovations are excluded.
Sources
Frequently asked questions
Does this show how much a lender will approve?
No. It is a planning estimate using the limits and costs you enter. A lender applies product-specific underwriting, documentation, credit, property, and jurisdiction rules.
Why are there two affordability limits?
A monthly payment may fit your income while the down payment and closing costs exceed available cash, or the reverse. The lower limit prevents either constraint from being ignored.
Why is maintenance included?
Maintenance is a real ownership budget item even though it is generally not part of a lender-style mortgage payment or DTI calculation. It is shown separately.
Which debts should I enter?
Use recurring monthly obligations relevant to your planning scenario, such as minimum credit-card, auto, student, personal-loan, and court-ordered payments. Definitions can vary by lender.
Why preserve a cash reserve?
Purchase cash is not the same as total savings. Keeping an explicit reserve avoids assuming every available currency unit can be spent at closing.
Are my financial details included in a shared link?
No. Income, debt, and cash inputs stay in the browser and are not written into the share URL.