Home Affordability Calculator

How lenders decide how much house you can afford

Lenders start from your gross monthly income, not the price of a house, and ask how much of it the new payment and your existing debts would take. That share is your debt-to-income ratio (DTI). The CFPB notes that different loan products and lenders set different DTI limits, which is why this calculator lets you choose them.

Lenders look at two versions. The front-end (housing) ratio counts only the new housing payment: principal and interest, property tax, homeowners insurance, mortgage insurance and HOA dues — the items FHA lists in its “total mortgage payment”. The back-end (total) ratio adds your other required debt payments, such as car loans, student loans and card minimums. Whichever runs out first sets your maximum price.

The three presets are typical lender guidelines, not rules:

None is a hard ceiling: Fannie Mae allows manually underwritten loans up to 45% with qualifying credit scores and reserves, and FHA permits higher ratios when an underwriter documents compensating factors such as cash reserves.

How to use the calculator

Enter household gross income, the monthly payments on debts that will remain after you buy, your down payment, rate and term, and estimates for property tax (% of the price per year), insurance, HOA dues and PMI. Pick a DTI preset or type your own limits. You’ll get the maximum price, the loan, both DTI ratios, the binding limit and the payment broken into its parts — or a clear message if your debts already use up the back-end limit.

The 6.75% default is illustrative: Freddie Mac’s survey averaged 6.76% for 30-year loans on September 10, 2026 (6.09% for 15-year loans). The 0.5% PMI default sits inside Freddie Mac’s estimate of about $30 to $70 a month per $100,000 borrowed.

How the maximum price is calculated

With gross monthly income G and monthly debts D, the front-end limit is front% × G, the back-end room is back% × G − D, and your housing budget is the smaller of the two.

The payment at price P is (P − down payment) × k, where k = r ÷ (1 − (1 + r)⁻ⁿ) for monthly rate r and n payments, plus P × tax% ÷ 12, insurance ÷ 12, HOA dues, and (P − down payment) × PMI% ÷ 12 when the down payment is under 20% of P.

Tax and PMI grow with the price, so the calculator can’t just divide the budget by a payment factor. On each side of the 20%-down point the payment is a straight line in P, so it solves each line exactly and keeps the one whose answer falls on its own side. The price is rounded down to the cent, and the payment at that price equals your budget to the cent. If your budget lands just past the point where PMI kicks in, the maximum stops at exactly 20% down.

A worked example

With the defaults — $100,000 of income ($8,333.33 a month), $500 of debts, $40,000 down, 6.75% for 30 years, 1% tax, $2,000 of insurance, 0.5% PMI and 28/36 limits — the front-end limit is 28% × $8,333.33 = $2,333.33 and the back-end room is 36% × $8,333.33 − $500 = $2,500, so the front-end ratio binds.

The maximum price is $315,767 with a $275,767 loan. The payment is $1,788.62 principal and interest + $263.14 tax + $166.67 insurance + $114.90 PMI = $2,333.33, exactly the limit. The down payment is 12.7% of the price, hence PMI, and the back-end DTI is 34.0%.

With $1,200 of debts the back-end room of $1,800 binds and the maximum falls to $246,825; at $4,000 of debts no home fits. With $80,000 down, PMI disappears and the maximum rises to $366,912.

How much house can you afford by income?

The calculator at seven incomes under each preset, with every other input at its default:

At $100,000, moving from 28/36 to 36/50 adds about 27% to the price — and $667 a month to the housing payment.

Tips and limitations

• Approved isn’t comfortable. DTI ignores income taxes, childcare, retirement saving and emergency funds.
• Keep cash for closing. The CFPB says closing costs typically run 2% to 5% of the purchase price, on top of the down payment.
• PMI ends. On a conventional loan you can request cancellation when the balance is scheduled to reach 80% of the original value, and it ends automatically at 78%. FHA mortgage insurance isn’t modeled.
• Use local tax and insurance figures. Tax Foundation data puts effective property tax rates from about 0.28% (Hawaii) to 2.38% (New Jersey); the NAIC’s average homeowners premium was $1,569 in 2022, up 11.2% in a year.
• Not modeled: loan limits, credit-score pricing, reserves, closing costs, points and adjustable rates.

Sources & references

• Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios — 36% maximum for manual underwriting, up to 45% with credit score and reserve requirements, and 50% for Desktop Underwriter loans.
• HUD Handbook 4155.1, Chapter 4, Section F — Borrower Qualifying Ratios — FHA’s 31% and 43% benchmarks, what the total mortgage payment includes, and compensating factors. FHA’s current policy is consolidated in Handbook 4000.1.
• CFPB — General QM Loan Definition final rule — removed the 43% DTI limit for General QM loans and replaced it with price-based thresholds.
• CFPB — What is a debt-to-income ratio? — how DTI is calculated.
• CFPB — Figure out how much you want to spend — what the monthly payment includes, mortgage insurance below 20% down, and 2%–5% closing costs.
• CFPB — When can I remove PMI? — the 80% request and 78% automatic termination rules.
• Freddie Mac Primary Mortgage Market Survey — average rates of 6.76% (30-year) and 6.09% (15-year) on September 10, 2026.
• Freddie Mac — Breaking down PMI — about $30 to $70 a month per $100,000 borrowed.
• Chase — The 28/36 rule — the guideline’s definition, based on gross income.
• Tax Foundation — How high are property taxes in your state? and Insurance Information Institute — homeowners insurance statistics (NAIC data).