How Much House Can You Actually Afford?

Separate a model’s payment allowance from the cash you can comfortably spend.

Use the Home Affordability alongside this illustrative example.

A practical example

With illustrative gross monthly income of 5,000 and a debt-to-income setting of 30%, the total model debt allowance is 1,500. Existing monthly debts of 400 leave 1,100 for the mortgage payment calculated by the model. Housing taxes, insurance and maintenance may require further budget outside that figure.

Check the result

Run a second scenario with a higher interest rate and compare the payment rather than only the maximum purchase price. Preserve cash for closing and emergencies instead of entering all savings as the deposit.

Try a comparison

Hold income and the ratio assumption fixed, then increase existing debts by 100 per month. The model’s mortgage allowance falls by 100. This makes the impact of a continuing car or card payment visible without treating the result as lending approval.

What this does not establish

This is not lending approval or a personalised affordability decision. A lender’s assessment and your actual household budget can differ substantially.

Further reading

CFPB homebuying resources explain loan comparisons and the steps to obtain and assess official loan offers. Rules outside the United States require local sources.

Report unclear guidance or a result that needs checking.