Home Affordability Calculator
Don't be "house poor". Find out exactly how much you can comfortably spend on a home while keeping your finances healthy.
Homeowners Association fees directly reduce your borrowing power.
Scroll down to get your amortization schedule
How Lenders Determine Your Home Budget
Banks and mortgage lenders use the 28/36 Rule to determine loan eligibility. Understanding these ratios helps you know exactly what lenders are looking for.
28% Front-End Ratio
Your monthly housing costs (mortgage + property tax + insurance) should not exceed 28% of your gross monthly income.
Example: $8,333/month income → Max $2,333 housing payment
36% Back-End Ratio
Your total monthly debt payments (housing + car + credit cards + student loans) should not exceed 36% of your gross monthly income.
Example: $8,333/month income → Max $3,000 total debt payments
If your other debts are high, your home budget will be lower to stay under the 36% limit. Paying off car loans or credit cards before buying can significantly increase your purchasing power.
Home Affordability by Salary
Here's a quick reference for typical home affordability at different income levels (assuming 20% down, 7% rate, minimal other debt):
| Annual Salary | Max Monthly Payment | Approximate Home Price |
|---|---|---|
| $75,000 | $1,750 | $260,000 - $300,000 |
| $100,000 | $2,333 | $350,000 - $400,000 |
| $150,000 | $3,500 | $525,000 - $600,000 |
| $200,000 | $4,667 | $700,000 - $800,000 |
3 Guaranteed Ways to Afford More House
Disappointed by your results? Small changes in your financial profile can drastically increase your purchasing power.
1. Eliminate Monthly Debts
Lenders look at monthly obligations. Paying off a $400/mo car payment increases your home buying power by roughly $60,000.
2. Boost Your Credit Score
Raising your score from 680 to 740 is huge. It can drop your rate by 0.5%, saving you $300/mo or adding $45k to your budget.
3. Reach 20% Down
Hitting 20% down payment removes PMI. That saved $150-$300/mo goes straight into your principal, buying you a bigger house.
Frequently Asked Questions
How much house can I afford on a $100K salary?
On a $100,000 salary, you can typically afford a home between $350,000 and $450,000. This assumes a 20% down payment, low existing debt, and a 7% interest rate. Your location matters too—check our $100K in Austin or $100K in Seattle guides.
What's the difference between pre-qualification and pre-approval?
Pre-qualification is an informal estimate based on self-reported information.Pre-approval is a formal process where the lender verifies your income, credit, and assets. Pre-approval carries more weight with sellers.
How does debt affect my home affordability?
Existing debt directly reduces your buying power. A $500/month car payment on a $100K salary could reduce your max home price by $75,000-$100,000. Consider paying off debts before buying.