THE NUMORIX GUIDE
How to use the House Affordability Calculator
Last reviewed September 14, 2026
What this calculator does
The calculator sets a maximum total housing-and-debt payment equal to annual income divided by 12 times the selected DTI ratio.
Formula and method
The calculator sets a maximum total housing-and-debt payment equal to annual income divided by 12 times the selected DTI ratio. It subtracts monthly debt, annual property tax divided by 12, annual insurance divided by 12, and monthly HOA from that ceiling. The remaining housing amount is converted to a loan with the fixed-rate mortgage formula, and the down payment is added to solve a maximum home price.
Variables and inputs
Enter annual income, monthly debt payments, down payment, loan term from 10 through 30 years, interest rate, annual property tax, annual insurance, monthly HOA, and a DTI choice of 28%, 36%, 43%, or 50%. In monthly-payment mode, also enter home price; all money fields are dollars and rates are percentages.
Worked example
With $80,000 annual income, $500 monthly debt, $40,000 down, 30 years at 6.5%, $3,000 annual tax, $1,500 annual insurance, no HOA, and a 43% DTI cap, maximum total payment is (80,000 / 12) x 0.43 = $2,866.67. Available mortgage payment is 2,866.67 - 500 - 250 - 125 = $1,991.67; the mortgage formula then converts that amount to a loan and adds the $40,000 down payment.
How to interpret the result
The home-price result is the maximum allowed by the selected ratio and entered costs, not a recommendation to spend that much. Monthly-payment mode shows the mortgage, tax, insurance, and HOA pieces separately so you can compare the result with actual household cash flow.
Common mistakes to avoid
Use gross annual income as the engine expects, not take-home pay. Include recurring debts in monthly debt payments and do not omit tax, insurance, or HOA just because a lender may escrow them. Check that the down payment is not being counted as monthly cash.
Assumptions and limitations
The selected DTI limits are planning assumptions, not approval rules. The model excludes credit score, mortgage insurance, closing costs, reserves, income documentation, variable rates, maintenance, and lender overlays. It also does not validate negative user-entered values.