Affordable Home Calculator

Formatting only. This does not change the calculation.
Income before tax, for every borrower on the loan.
Car loans, student loans, credit-card minimums, child support - everything except the new housing payment.
Annual property tax as a percentage of the home value.
Annual mortgage insurance premium as a percentage of the loan balance. Charged only above the LTV threshold below.
Maximum home price
330,642.94
Home Affordability Calculator
Maximum loan amount
264,514.35
Down payment
66,128.59
Maximum monthly housing payment
2,100.00
Principal and interest
1,671.91
Monthly property tax
303.09
Monthly home insurance
125.00
Monthly mortgage insurance
0.00
Monthly HOA dues
0.00
Housing-ratio cap
2,100.00
Total-debt-ratio cap
2,200.00
Which ratio binds
front-end
Loan-to-value
80.00 %
Mortgage insurance charged
no
Monthly gross income
7,500.00
Worked out from Fannie Mae Selling Guide B3-6-02: Debt-to-Income Ratios and 3 other sources.
Property tax and insurance are modelled as a rate on the price and a flat annual premium. Actual escrow depends on the assessed value and the policy quoted.
An estimate, not a pre-approval. Lenders also weigh credit score, reserves, employment history, loan programme limits and their own overlays, and the ratios below are guidelines rather than entitlements.

How this is worked out

8 steps
  1. Monthly gross income = 90000 / 12 = 7500
  2. Housing-ratio cap = 28% x 7500 = 2100
  3. Total-debt cap = 36% x 7500 - 500 = 2200
  4. Housing budget = min of the two = 2100 (the front-end ratio binds)
  5. Annuity factor k = i / (1 - (1+i)^-n) with i = 0.541667% and n = 360 gives 0.00632068
  6. Price = (budget - fixed costs) / ((k) x (1 - 0.2) + monthly tax rate) = 330642.94
  7. Loan = 330642.94 - 66128.59 = 264514.35
  8. Check: P&I 1671.91 + tax 303.09 + insurance 125 + mortgage insurance 0 + HOA 0 = 2100

Results are general information, not financial, tax, legal, medical or engineering advice.