House Affordability Calculator

Use our free House Affordability Calculator to quickly estimate how much home you can afford, based on key inputs like income, debt, interest rate, and loan term. Perfect for homebuyers and investors.

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House Affordability Formula

1. Maximum Affordable Monthly Payment: 28% Rule: Monthly Income × 0.28 36% Rule: (Monthly Income × 0.36) - Monthly Debts Maximum Affordable Monthly Payment = Lower of the two values 2. Maximum Mortgage Amount: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ - 1] Where: - M = Monthly payment - P = Loan principal (what we're solving for) - r = Monthly interest rate (Annual ÷ 12) - n = Total number of payments (Years × 12)
Example:
Monthly Income = $6,000 Monthly Debts = $500 Interest Rate = 6.5% Term = 30 years 28% Rule: $6,000 × 0.28 = $1,680 36% Rule: ($6,000 × 0.36) - $500 = $1,660 Maximum Affordable Monthly Payment = $1,660 Monthly Interest Rate = 6.5% ÷ 12 = 0.54% Term in Months = 30 × 12 = 360 Maximum Mortgage Amount = $263,000 With $50,000 Down Payment: Maximum Home Price = $313,000

This formula shows the maximum home you can afford without overextending your budget. Lenders use similar ratios when approving loans.

How this house affordability calculator works

This calculator estimates your maximum affordable home price by applying debt-to-income (DTI) ratios and standard mortgage payment formulas. It factors in income, debt, loan terms, taxes, insurance, and HOA fees to provide a realistic affordability range.

When to use this house affordability calculator

Before starting your home search to set a realistic budget

To see how income, debt, or down payment affects affordability

To compare affordability under different interest rates and loan terms

For planning property tax and insurance into your monthly budget

To prepare for pre-approval with confidence

Want to make your home planning smarter?

Use ServiceAgent.ai to automate estimates, manage proposals, and track profitability—all from one dashboard.

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Average Profit Margins by Industry

Understand how mortgage and housing services compare to other industries. Below are typical profit margin ranges:

Mortgage Lenders

15–25%
net margin

Real Estate Agents/Brokerages

15–30%
net margin

Roofing Contractors

20–40%
net margin

HVAC Contractors

10–20%
net margin

Plumbing Contractors

20–35%
net margin

Electrical Contractors

15–25%
net margin

Cleaning Services

50–70%
net margin

Construction/Contracting

15–30%
net margin

These benchmarks help homebuyers and real estate professionals assess whether costs and services are competitive.

Frequently Asked Questions

It provides a reliable estimate using DTI ratios and your inputs. Lender-approved amounts may vary.

Income, debts, down payment, interest rate, and loan term.

Yes—just include HOA dues if applicable.

Absolutely. It helps estimate purchase budgets for rental properties.

Yes—lenders typically allow 28–31% for housing, but you can change it for your scenario.

No—closing costs are separate and typically 2–5% of the purchase price.

Yes—input the initial interest rate for an estimate, but note future adjustments may change affordability.

Pair it with ServiceAgent.ai to automate affordability estimates, client proposals, and loan tracking.

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