How much home can you actually afford?

As a rule of thumb, your total monthly housing payment should stay under 28% of your gross monthly income, and all debts combined under 36%. This calculator uses these guidelines (adjusted by country) to estimate your affordable home price.

A common guideline: your housing costs should be under 28% of gross monthly income (front-end ratio), and all debt payments combined — including housing — under 36% (back-end ratio or DTI). It's a conservative standard; some lenders allow up to 43%.

No. Eligibility is the maximum a lender will approve, based on their risk tolerance. Affordability is what fits comfortably within your real budget. Affordability is usually lower — and safer.

We take your gross monthly income, apply a DTI ratio (default 36%), subtract existing debts to find your maximum housing budget, then subtract property tax, insurance, and HOA fees to find the maximum principal and interest payment. From that, we reverse-calculate the maximum loan amount. Add your down payment, and that's your affordable home price.

36% is a safe, conservative default. Some lenders approve up to 43%, and in some markets (like India) FOIR can go up to 55% for strong borrowers. But a lower DTI leaves more breathing room in your budget — especially against future rate changes or income disruption.

Yes — significantly. Property tax rates vary from ~0.3% (Hawaii) to ~2.5% (New Jersey) in the US. On a $400,000 home, that's a difference of $800/month. High-tax areas reduce the price you can afford for the same monthly budget.

HOA fees directly reduce what you can spend on the home itself. A $500/month HOA fee is like adding $85,000 to your loan at current rates. If you're considering a condo or managed community, factor this in.

Lenders typically count 50%–100% of documented, consistent bonus income. But for personal affordability, it's safest to base your decision on base salary only. That way, a lower-than-expected bonus year doesn't put you under pressure.

Yes, significantly. Combining incomes typically increases affordability by 50%–100%, depending on the co-applicant's income and debts. This is often the single biggest lever available.

A longer loan term means a lower monthly payment for the same loan amount — which means you can afford a more expensive home. But you'll pay much more total interest. A 30-year term increases affordability by ~15%–20% versus a 15-year term at the same rate.

20% avoids PMI (US), CMHC insurance (Canada), and LMI (Australia). But it's not always the right choice — in a rising market, waiting to save 20% can cost you more than the insurance premium. The right answer depends on your market and timeline.

No. Rent is not counted as a "fixed obligation" by lenders in most countries, because it disappears once you own a home. Only loan EMIs, credit card minimums, and co-signed loans reduce your affordability.

Use your average over the last 2–3 years — not your best month. Lenders do the same for self-employed borrowers, often applying a 10%–20% discount for stability. Being conservative here protects you if a slow period hits.

No. Closing costs are separate — typically 2%–5% of the home price, paid upfront. On a $400,000 home, that's $8,000–$20,000. Budget for them in addition to your down payment.

Private Mortgage Insurance (US) is required when your down payment is below 20%. It typically costs 0.3%–1.5% of the loan amount per year, reducing what you can spend on the home. Canada has CMHC insurance, Australia has LMI — all similar in effect.

It depends on your market, timeline, and life stage. Buying usually wins if you plan to stay 5+ years; renting wins if you need flexibility. Use the Buy vs Rent calculator to compare scenarios with your actual numbers.

Aim for 3–6 months of living expenses in an emergency fund, separate from your down payment. New homeowners often underestimate the one-off costs (furniture, repairs, taxes) that hit in the first year.

It usually means one of three things: your income is low relative to home prices, your existing debts are eating into your budget, or you need more down payment. Each has a path — increase income, clear debts, save more, or look at a different location or type of home.

Yes, but affordability is tighter. A single income has less buffer, so it's especially important to keep your housing cost below 28% and maintain a healthy emergency fund. Some markets are simply not affordable on one median income.

In the US, mortgage interest and property tax may be deductible if you itemize. In India, home loan interest is deductible under Section 24(b) up to ₹2 lakh per year. Tax benefits reduce the effective cost, but they don't change what a lender will let you borrow.

Indirectly, yes. A better credit score gets you a lower interest rate — which means you can afford a more expensive home for the same monthly payment. On a $400,000 loan, 0.5% lower rate is roughly $120/month — worth about $20,000 more home.

30 years maximizes affordability (bigger loan for the same monthly payment). 15 years minimizes total interest. If you can comfortably afford the 15-year payment, it saves six figures over the life of the loan. If it stretches your budget, 30 years is safer.

Yes — and it's often overlooked. Budget 1% of home value per year for maintenance and repairs. On a $400,000 home, that's $4,000/year (~$333/month). This isn't part of your mortgage payment, but it's part of what you can truly afford.

Yes, but student loan payments reduce your DTI headroom, which reduces what you can afford. If your student loan payments are high relative to your income, consider paying them down before buying, or expect a smaller home budget.

Some lenders will count projected rental income, but only with documented leases and often at 50%–75% of the actual rent. This calculator doesn't include rental income — add it to your annual income field as a rough estimate, but be conservative.

Enormously. Property tax, insurance, and home prices vary widely by city — even within the same country. A home that's affordable in one city might be out of reach two hours away. Adjust the inputs to model your target location.

Rates change constantly. The calculator shows typical default rates by country (e.g., 6.5% for US 30-year fixed, 5.25% for UK). For current rates, check with 2–3 lenders and use the best offer.

For personal affordability, we recommend using your base salary only. That way, a slower bonus year doesn't put pressure on your mortgage payment. If you're confident about consistent bonuses, you can include them — but always leave a buffer.

Yes. Pick your country, and the calculator automatically switches currency symbol, number formatting, default interest rate, default loan term, and local terminology.

No. This calculator gives an estimate based on standard ratios and typical costs. Real affordability depends on your lender's specific criteria, your actual budget, and local market conditions. Always verify with a lender.

Yes, completely free. And everything runs in your browser — no data is uploaded or stored.

Currently US, UK, Canada, Australia, India, UAE, Singapore, and Germany. We plan to add New Zealand, Ireland, South Africa, and the Netherlands next.

No. All calculations happen in your browser. Nothing is uploaded, tracked, or stored.