I doubt this is accurate. It says I can afford a $3 million home, whereas the banks are telling me I can't even get a place for $400K.

@ceejceej: Ha! For us it's the other way around: Bank says 650K, calculator says 325K! :-D

It's probably just applying the monthly mortgage payment less than 25% of income and total debt load less than 33% of income rules of thumb.

@ceejceej: same here. the calculator is telling me that I can afford to buy Trump Towers... but I can't even get a Target store credit card. :/

@CEEJCEEJ I think the issue is that the first field if for MONTHLY wages. What does that mean by the way? Before or After taxes?

This one's easy... figure 50-75% of what the bank says they'll give you is probably all you can afford... Always buy less house than you think you can afford -- then you'll have money for all of those emergency repairs which creep up at the worst time.

@Rayzincrisp: It's Gross Monthly Income, meaning pre-tax.

I correctly entered my pre-tax monthly income, and with a state-subsidized interest rate and almost zero monthly dept payments, the calculator is telling me that I can't even afford the modest rental property that I've been comforably renting for two years, let alone a house.

I'm not sure how they're calculating these numbers, but they're pretty wacky.

Yea, this assumes you can spend 1/3 of your net income (after other debt payments) on a home mortgage, and the rest on food, electricity and cable, I guess.

I don't get the whole property tax thing, because if you have to enter that, it's not telling how you much house you can afford, just whether you can afford a particular house with particular property taxes. (Ditto for insurance.)

That's depressing... my wife & I's wages have doubled since leaving California (12K/mo) and even with no other debts we can't afford to buy the modest ranch house I grew up in back there... and my parents were just a couple of kids working in a proto-Target when they bought it.

@hoosier45678: Good thing they didn't have the intenet back then, or your parents would have found out they couldn't afford the house, and never bought it.

This calculator is profoundly defective. Put in $10,000 / month income, and a $400,000 down payment, with no other dept.

Machine says you could afford a $115 / month mortgage payment.

Seems a little conservative.

Yeah, this calculator is whack, and in comparing it with, say, the CNN one ([cgi.money.cnn.com]) I *think* what they're not looking at is the debt-to-income ratio. They seem to just be taking a third of your gross income, as B suggests. I'm boggled (where "boggled" = "falling about laughing") that the Bankrate calculator seems to think I could afford a $453,000 house on a $60,000 income. Uh, yeah, not ready to join the foreclosed throngs yet...

Maybe it just isn't working for me, but no matter what numbers I input the calculator tells me I can only afford a house that equals the amount of my down payment. I guess is just want to keep me out of debt?

Here's a whole site with a number of different calculators for mortgages, including a nice rent v. buy that showed me I would be better off renting.

Hey! It didn't show up.

Let's try it again!

[www.mortgage-calc.com]

The tax and insurance bit is indeed weird. Aren't both of those going to be tied to the price of the house?