Home Affordability Calculator
Lenders size a mortgage against two ratios: housing costs against gross income, and total debt against gross income. On a $120,000 income with no other monthly debt and 20% down at 6.729%, the 28% housing ratio binds first and supports a home price of about $409,100. Adding other debt makes the second ratio bind instead.
This estimate does not include property taxes, homeowners insurance, mortgage insurance or HOA dues. Your actual payment obligation will be greater.
These figures are the arithmetic of the assumptions you entered. BEDRWay is not a lender, does not quote rates, and this is not a loan offer, a pre-qualification or a commitment to lend. A licensed loan officer runs your actual numbers.
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How the maths works
Two ratios are tested, and the tighter of them decides. Both are measured against gross monthly income, meaning before tax rather than what lands in the account:
Housing ratio = (P&I + taxes + insurance) ÷ gross monthly income
Total debt ratio = (housing + other debt payments) ÷ gross monthly income
The conventional ceilings are 28% and 36%, the pair usually called the 28/36 rule. Whichever is hit first sets the answer, and the calculator above shows both so you can see which one is doing the work.
Turning an allowed monthly figure back into a price is not guesswork, because taxes and insurance scale with the price as well. Writing d for the down payment fraction and f for the payment per dollar borrowed, the whole thing rearranges into a single division:
price = housing allowance ÷ [ (1 − d) × f + (tax% + insurance%) ÷ 12 ]
Which ratio is holding you back
This is the useful question, and it has two very different answers. With no other monthly debt, the housing ratio binds: at the numbers above it lands on 28% while the total debt ratio also reads 28%, because there is nothing else in it. Saving a larger down payment moves the answer.
Add other debt and the picture inverts. At the same income with $1,500 of car and student loan payments each month, the housing ratio falls to 21% while the total debt ratio pins at its 36% ceiling, and the supported price drops by roughly a quarter. At that point clearing a balance moves the answer further than saving does, which is the opposite of the usual advice.
What the ratios ignore
Maintenance is not in either of them. Lenders do not count it, so this calculator does not either, but a house consumes real money every year regardless of what the underwriting says. Neither ratio knows about childcare, medical costs, or a variable income, and none of those stop existing because a formula omits them.
The Consumer Financial Protection Bureau declines to publish a debt-to-income threshold at all, on the grounds that different loan products and lenders set different limits. The 28/36 pair is a convention that programmes were built around, not a rule with legal force. FHA and VA underwriting both use different numbers.
A ceiling is not a target
The figure above is the most these ratios permit, which is a different thing from the most you should spend. It assumes the income holds, leaves nothing for the roof, and treats the tax and insurance rates in the boxes as facts when they are estimates. People who are still comfortable five years later have almost always bought below what a calculator told them they could.
What other incomes support, with no other debt
| Income | At 6.000% | At 6.729% | At 7.500% |
|---|---|---|---|
| $60,000 | $216,615 | $204,550 | $192,827 |
| $90,000 | $324,923 | $306,825 | $289,241 |
| $120,000 | $433,231 | $409,100 | $385,655 |
| $150,000 | $541,538 | $511,375 | $482,068 |
| $200,000 | $722,051 | $681,834 | $642,758 |
This estimate does not include property taxes, homeowners insurance, mortgage insurance or HOA dues. Your actual payment obligation will be greater.
These figures are the arithmetic of the assumptions you entered. BEDRWay is not a lender, does not quote rates, and this is not a loan offer, a pre-qualification or a commitment to lend. A licensed loan officer runs your actual numbers.
Frequently asked questions
What is the 28/36 rule?
It is the convention that housing costs should stay under 28% of gross monthly income and all debt payments under 36%. Both are tested and the tighter one decides. It is a guideline lenders built programmes around, not a law, and FHA and VA underwriting use different numbers.
Which ratio is holding me back?
Whichever is closer to its ceiling. With no other monthly debt the housing ratio almost always binds, so a larger down payment moves the answer. With significant car or student loan payments the total debt ratio binds instead, and paying down a balance moves the answer more than saving does.
Should I borrow the maximum?
This is the ceiling the ratios permit, not a recommendation. It leaves nothing for maintenance, which runs to real money on any house, and it assumes your income holds. Most people who are comfortable years later bought below what a calculator told them they could.
Why does this not ask for my credit score?
Because credit does not enter either ratio. It changes the rate a lender would offer, which is an input here rather than something this page decides, and it changes which loan programmes are open to you. Both are questions for a licensed loan officer, not for a calculator.
Sources
- Freddie Mac Primary Mortgage Market Survey, national weekly average mortgage rates, retrieved 2026-08-24
- CFPB, what is a debt-to-income ratio, retrieved 2026-08-24
Last updated: August 25, 2026