How to Use the House Poor Risk Calculator

Being house poor means the home looks affordable on a lender’s letter but leaves too little take-home for ordinary life. This free calculator estimates true monthly housing cost — mortgage, tax, insurance, maintenance, utilities and fees — then scores the squeeze against your net pay, other bills and existing debts.

Step-by-Step Guide

1. Enter income and the costs you already have

Start with cash that actually arrives in your account, not the salary on an offer letter:

Currency: Choose your currency (e.g. USD, EUR, GBP). Symbols update across the page.
Monthly take-home pay: Net pay after tax and payroll deductions. Household combined pay if you are buying together.
Monthly gross pay (optional): Used only to show a lender-style debt-to-income snapshot. The risk score ignores it.
Other monthly bills: Everyday living costs that are not the house — food, transport, childcare, subscriptions.
Existing monthly debt payments: Car finance, student loans, card minimums and similar.
Saved inputs: values stay in this browser and restore on your next visit. Use Clear saved inputs to return to defaults.

2. Describe the house and the loan

The repayment uses a standard fixed-rate amortising formula:

Monthly repayment: M = L × [i(1+i)ⁿ] / [(1+i)ⁿ − 1]

Home price and deposit set the loan amount and loan-to-value (LTV).
Interest rate and term (default 30 years) set the principal-and-interest payment.
Property / council tax can be entered monthly or as an annual bill.
Insurance, HOA / service charge, PMI and utilities are monthly cash costs.
Maintenance defaults to 1% of home value per year, converted to a monthly reserve. Switch to a fixed monthly budget if you prefer.

3. Read the risk score

Results update as you type. The headline band uses take-home, not gross pay, and takes the worse of two tests: housing burden and leftover cash.

Comfortable — true housing ≤ 25% of take-home and leftover after housing, bills and debts ≥ 20% of take-home.
Stretched — housing 25–35%, or leftover 10–20%.
House-poor risk — housing 35–45%, or leftover 5–10%.
Severely house poor — housing above 45%, leftover under 5%, or a monthly shortfall.

True monthly housing is principal & interest plus tax, insurance, HOA, PMI, the maintenance reserve and utilities. That is the number to compare with take-home — not the mortgage quote alone.

4. Use the extra views

25% take-home rule: your comfortable housing ceiling versus actual true housing.
Lender-style DTI: front-end (PITI + HOA + PMI ÷ gross) and back-end (plus other debts). A classic 28/36 guide is shown for context. Approval ≠ comfort.
Stress checks: rate +1 percentage point, maintenance at 1.5% of value, and a 10% drop in take-home — each reports whether the band worsens.
Cash-flow chart: one month of take-home stacked into housing, other bills, debts and leftover (or shortfall).
Monthly breakdown table: every line as money and as a share of take-home.

Common Scenarios & Examples

Scenario: The quote looks fine — the month does not

Goal: Test a typical “we got approved” purchase against real take-home cash flow.

Select your currency (e.g. USD).
Set monthly take-home to $4,500 and optional gross to $6,000.
Other bills $1,400 · existing debts $350.
Home price $350,000 · deposit $35,000 · rate 6.5% · 30 years.
Tax $250 / month · insurance $120 · maintenance 1% · utilities $180.

Approximate results:

Principal & interest ≈ $1,991
True monthly housing ≈ $2,833 (about 63% of take-home)
Left after housing + bills + debts ≈ $−83

Band: Severely house poor. A lender looking at gross pay and PITI only can still call this “approvable.” The month does not.

Scenario: Using the 25% take-home ceiling

Goal: See how much true housing still leaves room to live and save.

Enter take-home of $6,500.
The 25% box shows a comfortable housing ceiling of about $1,625 a month — that is all-in housing, not just the mortgage.
Lower the price, raise the deposit, or lengthen only if you accept more interest; watch the leftover bar on the chart stay green.

25% rule at $6,500 take-home:

Comfortable true-housing ceiling ≈ $1,625 per month

Disclaimer & Limitations

Not Professional Advice: This calculator is an estimation and educational tool and does not constitute professional financial, mortgage or tax advice. Actual payments, taxes, insurance premiums and maintenance bills vary. Consult a qualified adviser and a lender for figures that apply to you.

Assumptions: Fixed interest rate, level monthly repayments, contributions of tax/insurance/HOA/utilities as entered, and maintenance as a smooth monthly reserve rather than lumpy repairs. No inflation of bills, no rate resets, and no fees or transaction costs unless you put them in the inputs.

Estimation Purposes Only: Risk bands are planning heuristics, not underwriting rules. Lender DTI uses gross income and typically excludes maintenance and utilities. A green band is not a recommendation to buy; a red band is not a prohibition.

Bug Reports and Suggested Improvements

Please email all suggestions for improvements and any bug reports to: housepoorriskcalc@personalfinances.me, thank you.

House Poor Risk Calculator – Mortgage Take-Home Stress Test

🏡 Your Numbers

📊 Results

📅 Monthly cost breakdown