Home Affordability by Salary Calculator

1. Enter gross annual household income and your current monthly debt payments.
2. Enter your down payment, mortgage rate and term.
3. Adjust property tax, insurance, HOA, PMI and the two debt ratios to match your situation and lender.

Quick answers

How much house can I afford on my salary?

The calculator caps the full monthly housing payment (principal, interest, tax, insurance, HOA and PMI) at your front-end ratio, and all debts at your back-end ratio, then solves for the home price both allow.

Why does my existing debt lower the price?

The back-end ratio counts car, student and card payments too, so every dollar of debt payment is a dollar less for housing.

Edge cases and limits

• This is an estimate from the ratios you set, not a lender approval.
• Rates and property taxes move the answer a lot; rerun with a quote from your lender and your county's rate.
• The How Much House Can I Afford guide (linked below) works through salary-to-price examples step by step using this calculator.

The calculator sets a monthly housing budget from your gross income, then searches for the highest price whose full monthly cost fits inside it. Property tax and PMI both depend on the price, so the price is solved numerically rather than with a single formula.

• Housing limit = gross monthly income × housing ratio
• Debt limit = gross monthly income × total debt ratio − monthly debts
• Budget = the lower of the two limits
• Monthly cost(price) = P&I on (price − down) + price × tax rate ÷ 12 + insurance ÷ 12 + HOA + PMI (if loan > 80% of price)
• Affordable price = the highest price where monthly cost ≤ budget

The price is the largest home whose full monthly cost stays inside both your housing ratio and your total debt ratio. The limiting rule tells you which lever matters: if it is total debt, paying down debt raises your budget dollar for dollar.

Common mistakes and assumptions

• Using take-home pay. Lenders' ratios use gross income.
• Leaving out property tax, insurance or HOA — they can be a third of the payment.
• Treating the maximum as the right budget. Leave room for maintenance and savings.
• Forgetting that a lower rate or larger down payment changes PMI as well as the loan.

A household earns $90,000, pays $400/month on a car loan, and has $40,000 down at 6.5% for 30 years.

1. 1Gross monthly income = $7,500.
2. 2Housing limit = 28% × $7,500 = $2,100; debt limit = 36% × $7,500 − $400 = $2,300.
3. 3The housing limit ($2,100) is lower, so it sets the budget.
4. 4The calculator finds the price where P&I, 1.1% tax, $150/month insurance and PMI add up to $2,100 — about $287,000, roughly 3.2× income (P&I $1,563, tax $263, insurance $150, PMI $124).

How much house can I afford on my salary?

A common starting point is a monthly housing payment of no more than 28% of gross income and total debt payments of no more than 36%. At today's rates that often lands between about 3 and 4.5 times annual income, depending on your debts, down payment, taxes and rate.

What is the 28/36 rule?

It is a guideline many lenders use: housing costs (principal, interest, taxes, insurance, HOA, PMI) up to 28% of gross monthly income, and all debt payments including housing up to 36%. Some loan programs allow higher back-end ratios.

Why does my car loan lower the house I can afford?

Debt payments count against the back-end limit. When 36% of income minus your debts is less than 28% of income, your debts become the binding constraint and each dollar of monthly debt removes a dollar of housing budget.

Is this the same as mortgage pre-approval?

No. Pre-approval uses your credit report, verified income, assets and the lender's program rules. Use this as a planning estimate and to see which levers matter most.

Should I borrow the maximum?

Not necessarily. The ratios are lending limits, not a comfortable budget. Leave room for maintenance, savings and irregular costs — the Budget Allocation Calculator can help check that.

Worked answers with real figures and stated assumptions, written around the question people usually arrive with.

• How much house can I afford on my salary?Convert income, debts and a down payment into a home-price range, with the tax and insurance drag included.