How much house can I afford? Calculation logic
The calculator supports two perspectives. Choose take-home income when you want a household-budget view, or gross income for a comparison that is closer to lender debt-to-income (DTI) conventions. In either mode, existing debts are subtracted and the remaining monthly budget is used to solve for a home price whose principal, interest and optional housing costs fit that limit.
Should I use take-home or gross income?
For day-to-day household planning, take-home income is usually easier because it reflects what actually reaches your budget; that is why the calculator defaults to it. Lender DTI comparisons conventionally use gross income before taxes and payroll deductions. The CFPB defines DTI as monthly debt payments divided by gross monthly income.
What does the 10%–60% ratio mean?
In take-home mode, the percentage is the share of take-home income you choose to reserve for existing debts plus the new home’s monthly costs. In gross mode, the same field acts as a DTI-style planning ratio. For example, $6,500 take-home income at 35% creates a $2,275 total monthly payment budget before existing debts are subtracted. Neither mode is a mortgage approval.
Why does the Turkish version use a monthly rate?
Mortgage rates are commonly presented as annual rates in global English-language markets, while Turkish consumer interfaces often show a monthly loan rate. When you switch languages, Hesapica automatically converts between the monthly rate and its equivalent nominal annual rate so the underlying payment assumption stays the same.
How do down payment and interest rate change the result?
A larger down payment can support a higher purchase price for the same monthly budget or reduce the amount borrowed. A higher mortgage rate reduces the loan principal that the same principal-and-interest payment can support. Changing these assumptions makes the trade-off visible immediately.
Why include property tax, insurance and HOA?
Real housing cost can exceed mortgage principal and interest. Property taxes, homeowners insurance, mortgage insurance when applicable, and HOA dues all consume part of the monthly budget. Leaving an unknown cost blank creates a simpler scenario, but remember that the estimate will then omit that expense.
This is not a mortgage pre-approval
The model does not evaluate credit score, income documentation, lender overlays, cash reserves, closing costs or country-specific underwriting rules. It is a planning scenario only. Use the Loan Calculator for a more detailed payment and amortization view.
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Frequently asked questions
Is this a mortgage pre-approval?
No. It is a planning estimate based only on the assumptions you enter.
What is DTI?
Debt-to-income ratio is your total monthly debt payments divided by gross monthly income.
Why include taxes and insurance?
Your real monthly housing cost is usually higher than principal and interest because property taxes, homeowners insurance and sometimes mortgage insurance also apply.
Should I use take-home or gross income?
Use take-home income for a personal household budget, or gross income for a comparison closer to lender DTI conventions. Gross-income mode is still not a mortgage approval.
Are closing costs included?
No. The estimate treats the entered down payment separately and does not add closing costs, cash reserves or other upfront purchase expenses.