Mortgage Affordability Calculator 2026 – How Much House Can I Afford?
Calculate how much house you can afford in 2026. Estimate monthly payments, DTI ratio, and mortgage qualification based on income and debts.
Mortgage Affordability Calculator 2026 – How Much House Can I Afford?
Introduction
The most common mistake homebuyers make is overestimating how much house they can afford. A Mortgage Affordability Calculator helps you determine a realistic budget based on your income, debts, and down payment—preventing you from becoming "house poor."
In this guide, we'll cover:
- The 28/36 rule for mortgage qualification
- How lenders calculate affordability
- Common pitfalls to avoid
- 2026 market conditions
Inputs
- Gross Monthly Income: Your total income before taxes.
- Monthly Debt Payments: Car loans, student loans, credit cards, etc.
- Down Payment: Cash you have available.
- Interest Rate: Current mortgage rates (as of 2026, ~6-7%).
- Property Taxes & Insurance: Local estimates.
The 28/36 Rule
Lenders use two key ratios:
1. Front-End Ratio (28%)
Your housing expenses (mortgage + taxes + insurance) should not exceed 28% of your gross monthly income.
Example: If you earn $8,000/month, your housing payment should be ≤ $2,240.
2. Back-End Ratio (36%)
Your total debt payments (housing + all other debts) should not exceed 36% of gross income.
Example: $8,000/month × 36% = $2,880 max for all debts.
How Much Can You Borrow?
Formula: Loan Amount = (Monthly Payment × Loan Term) / Monthly Interest Rate
Example:
- Income: $100,000/year ($8,333/month)
- Down Payment: $40,000
- Max Housing Payment: $2,333 (28%)
- Interest Rate: 7% (0.583% monthly)
- Loan Term: 30 years
Affordable Loan: ~$350,000
Total Home Price: $390,000
2026 Market Reality
With higher interest rates, affordability has decreased significantly:
- 2020: A $100k income could buy a ~$500k home at 3% rates.
- 2026: The same income can afford ~$390k at 7% rates.
Tip: Consider buying below your max to leave room for lifestyle flexibility.
FAQ
Q: Should I include HOA fees? A: Yes. Lenders include HOA fees in your front-end ratio.
Q: What if I'm self-employed? A: Lenders typically average your last 2 years of income. Have tax returns ready.
Q: Can I afford more if I have no other debts? A: Yes, but lenders still cap housing at ~28-31% as a safety buffer.
Related Tools
- Mortgage Calculator: /calculator/04-mortgage-calculator
- DTI Calculator: /calculator/105-debt-to-income-dti-calculator-2026
Conclusion
Just because a lender approves you for a certain amount doesn't mean you should borrow it all. Use the Mortgage Affordability Calculator to find a comfortable payment that leaves room for savings, emergencies, and life.
Key Takeaways
- Compare mortgage rates and terms to find the most affordable option
- A larger down payment reduces your monthly payment and total interest
- Consider refinancing when rates drop significantly below your current rate
How to Use This Calculator
- Enter your financial details in the fields above
- Adjust parameters to match your specific situation
- Review the calculated results and projections
- Compare different scenarios to find the optimal strategy
Tips for Better Results
- Use realistic estimates based on current market conditions
- Update your calculations regularly as your situation changes
- Consider consulting a financial advisor for complex decisions
- Remember that calculator results are estimates, not guarantees