Home Affordability Calculator
Find your maximum home price using the same income and debt rules lenders actually use.
Monthly Payment Breakdown at $301,000
How Lenders Decide What You Can Afford
Mortgage lenders use debt-to-income (DTI) ratios to determine how much they'll lend you. The two key limits are the front-end ratio (housing costs only) and the back-end ratio (all monthly debts). This calculator applies both rules and shows you the lower of the two — which is what a real lender would approve.
The 28/43 DTI Rule Explained
Then solve for home price: find P where EMI(P − down) + tax + insurance + PMI = max PITI
Affordability by Income Level
| Annual Income | No Debts, 10% Down | $500/mo Debts, 10% Down | $500/mo Debts, 20% Down |
|---|---|---|---|
| $60,000 | ~$210,000 | ~$175,000 | ~$195,000 |
| $80,000 | ~$280,000 | ~$235,000 | ~$260,000 |
| $100,000 | ~$350,000 | ~$295,000 | ~$325,000 |
| $150,000 | ~$525,000 | ~$440,000 | ~$490,000 |
Estimates at 6.85% rate, 1.1% property tax, $1,500 annual insurance. Use calculator for your exact figures.
Just because you qualify doesn't mean you should
Lender DTI limits represent the maximum they'll approve — not the amount that makes financial sense. At 43% back-end DTI, your housing and debt payments consume nearly half your gross income. After taxes, you'd have very little left. Most financial advisors recommend keeping total housing costs below 28–30% of gross income and avoiding the maximum qualification amount by $50,000–$100,000 as a buffer.
Key Terms
- PITI
- Principal, Interest, Taxes, and Insurance — the four components of a full monthly mortgage payment. Lenders qualify you based on PITI, not just principal and interest.
- Front-End DTI
- Housing costs (PITI) divided by gross monthly income. Most conventional loans require this to be 28% or below.
- Back-End DTI
- All monthly debt payments (PITI + car loans + student loans + minimum credit card payments) divided by gross monthly income. Most conventional loans require 43% or below.
- PMI (Private Mortgage Insurance)
- Required when your down payment is less than 20% of the purchase price. Typically costs 0.5–1.5% of the loan annually and adds $100–$400/month to your payment.
- Conventional Loan
- A mortgage not backed by the government, typically requiring 620+ credit score and 3–20% down. Follows Fannie Mae/Freddie Mac guidelines.
- FHA Loan
- Government-backed mortgage allowing lower credit scores (580+) and smaller down payments (3.5%). Comes with mandatory mortgage insurance for the life of the loan in most cases.
"Buying a home while carrying existing debt is one of the most financially stressful decisions you can make. Understanding your DTI — and tackling the debts that hurt it most — is the smartest prep work you can do."
Read the home-buying debt guide at The Silent Debtthesilentdebt.com
Frequently Asked Questions
How much house can I afford on my income?
The standard lender rule is the 28/43 guideline: your monthly housing costs (PITI — principal, interest, taxes, insurance) should not exceed 28% of gross monthly income, and your total monthly debts should not exceed 43%. So on a $90,000/year income ($7,500/month), lenders typically allow up to $2,100 for PITI. At current rates, that translates to roughly $300,000–$350,000 in home price depending on your down payment and local taxes.
What is the 28/43 rule?
The 28/43 rule is the most widely used lender guideline for mortgage qualification. The "28" means your front-end ratio — housing costs as a percentage of gross income — should be 28% or less. The "43" means your back-end ratio — all monthly debt payments (housing + car + student loans + credit cards) as a percentage of gross income — should be 43% or less. If either limit is exceeded, most conventional lenders will not approve the loan.
What is DTI and why does it matter?
DTI stands for Debt-to-Income ratio. Lenders use it to assess your ability to manage monthly payments and repay debts. Front-end DTI includes only housing costs; back-end DTI includes all monthly debts. Most conventional loans require back-end DTI below 43%, though some FHA loans allow up to 50% with compensating factors like large reserves or high credit scores. A lower DTI gives you more loan options and better rates.
Does down payment affect how much house I can afford?
Yes, in two ways. First, a larger down payment means a smaller loan, which lowers your monthly principal and interest payment — allowing you to afford a more expensive home within the same DTI limit. Second, putting 20% or more down eliminates PMI (Private Mortgage Insurance), which typically costs 0.5–1.5% of the loan annually. Eliminating PMI on a $300,000 loan saves roughly $125–$375 per month.
What costs should I budget for beyond the mortgage payment?
PITI (principal, interest, taxes, insurance) is just the start. You should also budget for: HOA fees ($100–$500+/month in many communities), maintenance (1% of home value per year is a common rule — $3,000/year on a $300,000 home), utilities, and capital reserves for major repairs (roof, HVAC, appliances). A common rule of thumb is to budget an additional 1–3% of home value per year for ownership costs beyond the mortgage.
Can I afford a home if I have existing debt?
Yes, but existing debt directly reduces how much mortgage you qualify for. Each $100 in monthly debt payments reduces your maximum mortgage by roughly $15,000–$20,000, because that $100 eats into the 43% DTI allowance. If you have $800/month in car and student loan payments, you have $800 less available for your mortgage. Paying down debts before buying — even partially — significantly increases your home buying power.
What credit score do I need to buy a house?
For conventional loans, a 620 score is typically the minimum, but 740+ gets you the best rates. FHA loans accept scores as low as 580 with 3.5% down. The rate difference between a 620 and 760 score can be 1–1.5 percentage points — on a $350,000 mortgage that's $200–$300 extra per month. Improving your credit score before applying is often the highest-ROI action you can take before buying.
Should I buy at the maximum I can afford?
Almost certainly not. Being "house poor" — spending the maximum your lender allows — leaves no room for unexpected expenses, career changes, or life events. Most financial advisors recommend targeting 25–28% of gross income for housing rather than the 43% maximum DTI. The difference between what you qualify for and what's financially wise can easily be $100,000–$200,000 in home price.