House Affordability Calculator
Overview
ToolYard's House Affordability Calculator shows how much home you can reasonably buy based on your income, debts, and local costs. Enter your interest rate, loan term, down payment, property tax, insurance, and HOA dues to see a full PITI estimate. Choose By Income to find the maximum affordable price, By Price to learn the income required for a specific home, or Reverse to work backward from a target monthly payment. The tool also accounts for PMI when your down payment is below 20%, estimates when PMI drops off, and includes a quick rate stress test so you can compare affordability at higher interest rates. Everything runs in your browser for privacy.
About
About House Affordability Calculator
Affordability depends on both cash flow and leverage. PITI captures the ongoing monthly cost of homeownership, while DTI limits temper risk by capping the share of income devoted to debt. This calculator models those mechanics directly, including property-specific costs and PMI for low down payments. Because affordability is sensitive to interest rates, we include a built-in stress test to show how a 1–3% APR change moves your budget. Results are estimates and assume a fixed-rate mortgage with consistent payments; for ARM loans or unusual taxes/HOA rules, rerun with updated values. No data leaves your device. The calculator computes your monthly PITI: principal and interest from the loan formula, plus taxes, insurance, PMI (if applicable), and HOA dues. It then checks your front-end DTI (housing only) and back-end DTI (housing plus other debts) against typical guidelines, which default to 28% and 36%. In By Income, we search for the highest price that keeps both ratios within your limits. In By Price, we compute the income needed to qualify. In Reverse, we search for the price that fits your target monthly housing budget. If PMI applies, we estimate when it falls off and show your reduced payment after that point. Use the stress test slider to see how changing interest rates affect affordability.
Features:
- Three calculation modes: By Income, By Price, and Target Payment
- Full PITI breakdown with PMI drop-off estimation
- Front-end and back-end DTI ratio analysis
- Interest rate stress testing (+0% to +3%)
- Customizable DTI limits to match lender requirements
- Support for property tax, insurance, HOA, and PMI
- Interactive charts showing affordability vs. interest rates
- CSV export for detailed analysis
FAQ
What DTI should I use?
28% front-end and 36% back-end are common guidelines. Adjust them to match your lender's criteria or personal comfort level.
How is PMI handled?
If your LTV is ≥ 80%, PMI is estimated monthly until your balance falls to 80% of the purchase price. The calculator shows when PMI drops off.
Can I use this outside the U.S.?
Yes. Choose your currency and enter local tax/insurance estimates. The calculation logic works for any fixed-rate mortgage.
Does this include closing costs?
The calculator focuses on ongoing monthly costs (PITI). Closing costs are typically 2-5% of the purchase price and paid upfront.
Are results guaranteed for approval?
No—lenders consider additional factors like credit score, employment history, and reserves. Treat results as planning estimates.
What's the difference between the three modes?
By Income finds your max affordable price given your income. By Price calculates the income needed for a specific home. Target Payment works backward from your desired monthly budget to find the max price.
How does the stress test work?
The stress test shows how your maximum affordable price changes if interest rates increase by 0% to 3%. This helps you plan for potential rate changes.