How Much Home Can You Afford?

One of the best places to start when planning for a new home is understanding how much home will fit into your family’s budget. Most lenders agree that total debt payments, including a mortgage, should not total more than 36% of gross income. To that end, a real estate debt calculator is a valuable tool to help prospective homeowners determine how much debt they can comfortably afford.


The debt calculator first inputs all monthly debt, such as car payments, credit cards, student loans, etc. Taking that information into account along with gross income, it calculates a maximum monthly home payment that is within the recommended parameters. The calculator presumes a 30-year mortgage and factors in homeowner’s insurance, current interest rates, and property tax.

Naturally, it is the buyers’ responsibility to determine whether there are mitigating factors that would necessitate reducing the maximum payment. However, the calculator gives them a good place to start.

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