How the Mortgage Affordability Calculator works
Estimate the home price that may fit your income. Adjust the inputs above, then use the calculate button to generate a fresh estimate based on the numbers you entered.
The result is designed to give you a quick planning number, plus a short breakdown of the major figures behind it. You can reset the form at any time and try a different scenario.
When to use this calculator
Use this mortgage affordability calculator early in your home search to estimate a practical price range from income, debt, down payment and rate assumptions. It is useful for setting expectations before viewing homes or requesting a formal mortgage pre-approval.
Formula
Estimated housing budget = monthly income x affordability guideline - monthly debt payments
- Income sets the starting point for the estimated payment budget.
- Existing debt reduces the room available for housing payments.
- Down payment adds purchasing power and lowers the required mortgage.
- Rate affects how much mortgage fits the same payment.
Worked example
With $120,000 annual household income, $600 in monthly debt, an $80,000 down payment and a 5% rate, the calculator estimates a home price range based on a simplified debt-to-income guideline.
Common mistakes
- Treating affordability as the same thing as comfort.
- Ignoring property tax, utilities, repairs and closing costs.
- Using the lowest possible rate without stress-testing a higher rate.
FAQs
Is this a pre-approval?
No. A lender will review your full credit, income, debts, property details and mortgage rules.
Why does debt reduce affordability?
Debt payments use part of your monthly cash flow, leaving less room for housing costs.
Should I buy at the maximum amount?
Not always. Leave room for savings, repairs, moving costs and lifestyle spending.