House Price-to-Income Ratio Calculator
Divide a home’s price by your gross household income to get the price-to-income ratio, its Demographia affordability rating, the loan-to-income ratio and the price you can afford at 3× income.
How it works
Price-to-income = home price ÷ annual gross household income · loan-to-income = price × (1 − down payment %) ÷ income · affordable price = 3 × income · income needed = price ÷ 3
The price-to-income ratio (the “median multiple” when applied to a whole market) is the simplest measure of housing affordability: how many years of gross income a home costs. The Demographia International Housing Affordability report, published with Chapman University, rates a multiple of 3.0 or less as affordable, 3.1–4.0 moderately unaffordable, 4.1–5.0 seriously unaffordable, 5.1–8.9 severely unaffordable and 9.0 or more impossibly unaffordable. Lenders in many countries also cap the loan-to-income ratio, often around 4 to 4.5×.
Worked example
A 400,000 home on a 100,000 gross household income is a price-to-income ratio of 4.00×, rated moderately unaffordable. With 20% down the loan is 320,000, a loan-to-income ratio of 3.20×. A 3× (affordable) price would be 300,000, and the income needed to buy this home at 3× is 133,333.33.
Sources: Demographia — Housing affordability rating categories · Demographia International Housing Affordability, 2024 edition
Frequently asked questions
What is a good house price-to-income ratio?
About 3× gross income or less is traditionally considered affordable. Many cities now run at 5× to 10× or more, which is why the same income buys much less house there.
Is price-to-income the same as debt-to-income?
No. Price-to-income compares the home price with yearly income; debt-to-income compares monthly debt payments with monthly income and is what lenders use to approve a mortgage.
What loan-to-income do lenders allow?
Many lenders limit mortgages to about 4 to 4.5 times gross income, and some regulators cap the share of loans above that. Interest rates and other debts also matter.
Should I use gross or net income?
Use gross (before-tax) household income — that is how Demographia and most housing studies define the ratio, so your result is comparable.
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Educational estimate, not financial advice. Your income, prices, taxes and returns will differ — use it to plan, then check the numbers against your own bank statements and, for big decisions, a qualified adviser.