How this calculator works

This page documents every formula, constant and data source behind the affordability figures on this site, including the parts that are estimates. If a number here looks wrong to you, it is meant to be checkable — and if you find an error, we want to hear about it.

The rule this site applies

Most calculators use the 28/36 rule against gross income: 28% of pre-tax pay toward housing, 36% toward all debt. This site does something different, for one reason — you cannot pay a mortgage with money that was withheld before it reached you.

The default here is 25% of take-home pay for all housing costs combined, with housing plus every other debt payment capped at 36% of take-home. "All-in" means principal, interest, property tax, homeowners insurance, PMI, HOA dues and a maintenance reserve — not just the loan payment. The 25% figure is adjustable between 18% and 35%, because it is a default rather than a law.

The maximum price is whichever of those two caps binds first. Below roughly 11% of take-home in other debt payments, the housing cap binds and additional debt changes nothing; above it, the total-debt cap takes over and each extra dollar of debt reduces the price.

How take-home pay is estimated

Starting from gross household income, the calculator subtracts, in order:

Pre-tax deductions. Your retirement contribution (default 6%) and health premiums (default $200/month). Health premiums are treated as a Section 125 deduction, so they reduce wages subject to payroll tax as well as income tax; retirement contributions reduce income tax only.

Federal income tax, using the 2026 brackets and standard deduction ($16,100 single, $32,200 married filing jointly):

FICA. Social Security at 6.2% on wages up to the $184,500 wage base, plus Medicare at 1.45% with an additional 0.9% above $200,000 single / $250,000 joint. When the household toggle is set to dual income, wages are split across two earners before applying the Social Security cap — a real effect that single-earner math gets wrong at higher incomes.

State income tax, using simplified per-state models covering all 50 states plus the District of Columbia.

State payroll add-ons that most calculators ignore entirely: California SDI, Ohio and Pennsylvania municipal income taxes, Maryland and Indiana county income taxes, and state paid-leave premiums where they exist. These are real deductions from real paychecks.

If you know your actual take-home pay, there is a field to enter it directly, which bypasses all of the above. That is the most accurate way to use this tool.

Property tax

Effective property tax rates for all 51 jurisdictions come from the Tax Foundation's 2026 property tax table, which is built on 2024 Census American Community Survey data. It measures tax actually paid as a percentage of home value, which is more useful than a published mill rate because it accounts for assessment ratios and exemptions.

The range runs from 0.29% in Hawaii to 1.88% in Illinois. County-level estimates are included for roughly 90 high-population counties where the local rate diverges meaningfully from the state average. The field is editable — if you have a specific property's tax bill, type it over the estimate. That is always more accurate than any average, including ours.

Homeowners insurance

State average annual premiums for 2026 are quoted at $300,000 of dwelling coverage, ranging from $738 in Hawaii to $8,471 in Florida. The calculator scales that average to your home price by assuming dwelling coverage of 8% of the purchase price, since land is not insured. Premium is then prorated against the $300,000 benchmark. You can override the annual premium with a real quote.

Mortgage rates

Rates are anchored to the Freddie Mac Primary Mortgage Market Survey 30-year fixed average of 6.71%, and spread across credit tiers to reflect loan-level price adjustments:

Shorter terms are adjusted downward: -0.35% for a 20-year and -0.75% for a 15-year loan. The rate field is editable, so a real quote always overrides the estimate.

PMI

Private mortgage insurance applies when the down payment is under 20%. The annual premium is estimated from the loan-to-value band — higher above 95%, 90% and 85% LTV — then scaled by a credit-score multiplier, and capped at 2.25% of the loan per year. PMI is included in the monthly figure rather than mentioned in a footnote.

Maintenance

A reserve of 1% of home value per year is included in the affordability budget by default, and can be switched off or adjusted. This is the single biggest reason our numbers come in below a lender's: maintenance is not escrowed, so no lender counts it, and every homeowner pays it anyway.

How the maximum price is found

Total monthly cost rises monotonically with price — a more expensive house is never cheaper to carry — so the calculator uses a binary search over price, converging to the highest price whose full monthly cost fits the budget. It runs 60 iterations and rounds down to the nearest $500. Everything executes in your browser; nothing is transmitted.

Loans above the $832,750 conforming limit are flagged, since jumbo pricing and stricter reserve requirements apply beyond it. Cash to close is estimated at the down payment plus 2.5% of the price.

How the "bank calculator" comparison is built

The comparison figure is not a straw man invented for effect. It applies the standard 28/36 rule to gross income, and uses the assumptions lender calculators typically ship with: a national-average property tax rate of 0.9%, a flat $1,500 annual insurance premium regardless of state, no HOA, and no maintenance.

The site then computes what that same house would actually cost using your real state figures, and expresses it as a share of your real take-home pay. That is where the gap comes from. It is worth noting that many lenders will approve well past 28/36 — debt-to-income ratios of 43–50% are routine — so the comparison figure is the conservative version of the lender number, not the aggressive one.

What is exact and what is an estimate

The honest summary: the mortgage mathematics is exact, the federal tax treatment is close, the state tax models are approximations, and the property-specific costs are averages until you replace them with real figures. Every field that matters is editable for exactly that reason.

What this site does not do

It does not collect what you type. The calculator runs entirely in your browser, sends nothing to a server, and stores nothing. There is no account, no tracking pixel, and no lead form — your numbers are not a product being sold to a lender. See the privacy policy for the full detail, including the one place where data is transmitted, which is the contact form.

It is also not advice. This is an educational estimate, not a pre-approval, an offer of credit, or tax advice. Verify property tax and insurance on any specific property before making an offer.

Updates and corrections

Mortgage rates are the fastest-moving input and are reviewed against the weekly Freddie Mac survey. Tax brackets, the Social Security wage base and the conforming loan limit are updated annually when the IRS, SSA and FHFA publish them. Property tax and insurance tables are updated when new annual data is released.

If you find an error, please report it. Corrections to the underlying data or the arithmetic are made promptly, and the guide pages are regenerated from the same engine whenever a figure changes, so a fix propagates everywhere at once rather than leaving stale numbers scattered across the site. Use the contact form.

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