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Financial Planning

Mortgage Affordability Calculator

Estimate the maximum home price and loan you may qualify for using front-end and back-end debt-to-income ratio limits.

Your inputs

Results

Estimated maximum home price

$460,299.87

Maximum loan amount
$400,299.87
Maximum monthly housing cost
$2,800.00
Of which principal & interest
$2,400.00
Binding limit
Housing ratio (front-end)

≈Estimate based on the stated model and assumptions

Inputs are never added to links for financial, salary or health calculators.

What this calculator does

Lenders typically cap how much of your gross income goes to housing (front-end ratio) and to all debts combined (back-end ratio). This tool applies both limits — 28 % and 36 % by default — to estimate a maximum loan.

Formula and method

Max housing = min(income/12 × front %, income/12 × back % − other debts) Max principal & interest = max housing − tax, insurance and HOA Max loan = PMT × (1 − (1 + i)^−n) / i; Max price = max loan + down payment

Worked example

Calculated by this tool with its default inputs:

Inputs

  • Gross annual household income: 120000 (any currency)
  • Other monthly debt payments: 500 (any currency)
  • Down payment available: 60000 (any currency)
  • Interest rate (annual): 6 %
  • Loan term: 30 years
  • Monthly property tax, insurance and HOA: 400 (any currency)
  • Maximum housing ratio (front-end): 28 %
  • Maximum total debt ratio (back-end): 36 %

Results

  • Estimated maximum home price: 460,299.87
  • Maximum loan amount: 400,299.87
  • Maximum monthly housing cost: 2,800
  • Of which principal & interest: 2,400
  • Binding limit: Housing ratio (front-end)

How to read the results

The binding limit tells you which ratio restricts you. If it is the back-end ratio, paying down other debts raises your budget more than a higher income would.

Assumptions and limitations

  • Lenders use their own ratios, credit scores and reserves; 28/36 is a common guideline, not a rule.
  • Qualifying for a loan is not the same as it being comfortable for your budget.
  • Results are estimates for planning and education, not individual financial advice.

Financial results are estimates based on the inputs and assumptions shown. They are not financial advice; confirm figures with your lender, provider or a qualified adviser before making decisions.

Questions

Which income should I enter?

Gross (pre-tax) household income, because lending ratios are conventionally based on gross income.

Methodology and verification

Result type
Estimate based on the stated model and assumptions
Formula version
1.0
Automated verification
3 reference and validation test cases, checked against independently computed values. The site cannot be built if any of them fail.
Editorial review
Awaiting human editorial review. The explanation was drafted with AI assistance; the formula and examples are verified by the automated tests above.

Privacy

Everything you enter is calculated in this browser and is not sent to Numerith or anyone else. Because this calculator can involve personal financial or health details, your inputs are never added to share links or saved to history. Privacy policy