Mortgage Affordability Calculator

By CalcMesh Editorial · Reviewed against primary-source formulas

28/36 Rule of Thumb

The traditional guideline: spend no more than 28% of gross monthly income on housing (PITI) and no more than 36% on all debt. Modern lenders are more flexible (FHA allows 31%/43%, some conventional loans go to 50% back-end), but the 28/36 rule keeps you financially comfortable.

True Cost of Homeownership

PITI: Principal + Interest + Taxes + Insurance
PMI: ~0.7-1.5%/year if down payment under 20%
HOA fees: $0-600+/month depending on community
Maintenance: Budget 1-2% of home value per year
Closing costs: 2-5% of loan amount (upfront)

Down Payment Options

20%+: No PMI, best rates, lowest monthly payment
10-19%: PMI required, good loan options
3.5-9.9%: FHA loans (3.5% min), conventional (3% min)
0%: VA loans (veterans) and USDA (rural areas)

Related Guides

How to Use a Mortgage Calculator Effectively — amortization, rate comparisons, and extra payment strategies

Related Data

Compare mortgage lenders and approval rates at CFPB HMDA. See property tax rates by county at Census property data. Check rental markets as a fallback at HUD Fair Market Rents.

Disclaimer: Affordability depends on your full financial picture, credit score, and lender. Get pre-approved to know your actual budget.

What "Affordable" Really Means in 2024

The Atlanta Fed's Home Ownership Affordability Monitor measured median U.S. housing affordability at 75.5 in late 2023 — the lowest reading since the series began in 2006 (100 = affordable). The typical median-income household would need to spend 43.7% of income on principal, interest, taxes, and insurance for a median-priced home, well above the 30% affordability threshold.

NAR's 2023 Profile of Home Buyers found first-time buyers fell to a record-low 32% of the market (down from the 40% long-term average), and the median first-time buyer income rose to $95,900. Median purchase price reached $389,800, meaning a 20% down payment requires $77,960 in cash plus 2-5% closing costs ($7,800-$19,500) — a $85,000-$100,000 savings bar.

The 28/36 rule remains the industry standard: housing costs should stay under 28% of gross monthly income and total debt under 36%. With 30-year rates at 6.81% and median home prices at $389,800, a 20%-down buyer needs a household income of roughly $98,000 to meet 28% DTI — above the $74,580 U.S. median. The gap explains why 2023 existing-home sales (4.09 million) fell to the lowest level since 1995.

Sources: Atlanta Fed HOAM, NAR 2023 Buyer Profile, Freddie Mac PMMS

Methodology & Assumptions

This calculator implements standard formulas drawn from primary-source authorities. Values are point-in-time estimates; consult a licensed professional for high-stakes decisions. See the per-input definitions and source citations below.

How this works

Computations are deterministic and run client-side — no inputs leave your browser. Formulas are derived from standard published formulas for the calculator's domain (mortgage, taxes, energy, conversions, etc.). When the underlying agency publishes updated rates or thresholds we refresh defaults and update the page's lastmod timestamp.

Frequently Asked Questions

How much house can I afford?

A general rule: keep housing costs (mortgage, taxes, insurance) under 28% of gross income (front-end DTI). Your total debt payments should stay under 36-43% (back-end DTI). Use both calculations — the stricter one limits your budget. Lenders will approve based on their DTI limits, which may let you borrow more than is comfortable.

What is PMI and when is it required?

Private Mortgage Insurance (PMI) is required when your down payment is less than 20% on a conventional loan. Cost: 0.5-1.5% of the loan amount per year, added to monthly payments. You can request PMI removal when your equity reaches 20% (by paying down principal or home appreciation).

How does my credit score affect my mortgage rate?

Your credit score significantly affects your mortgage rate. With a 760+ score, you'll get the best rates. A 640 score might add 1-2% to your rate. On a $350,000 loan at 30 years, a 1% rate difference costs about $70,000 more in total interest. Improving your score before applying can save thousands.

Should I get pre-approved before house hunting?

Yes. Pre-approval shows sellers you're serious and gives you a firm budget. It requires a hard credit pull and full income documentation. Pre-qualification is a softer estimate without verification. Most sellers and agents won't take offers seriously without a pre-approval letter.