Find out how much house you can afford based on your income and monthly debts.
Determining how much house you can afford involves balancing your income, existing debts, and the costs of homeownership. Lenders primarily use your debt-to-income (DTI) ratio to decide how much they're willing to lend. This calculator uses your target DTI to work backwards from your income to find the maximum home price you can comfortably afford.
The 28/36 rule is a widely-used guideline:
For example, with a $85,000 annual income ($7,083/month), the 28% front-end limit is $1,983/month for housing, and the 36% back-end limit is $2,550/month for all debts.
A common guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing costs (PITI) and no more than 36% on all debts combined. This calculator uses your target DTI ratio to determine the maximum home price you can comfortably afford.
DTI is your total monthly debt payments divided by gross monthly income. Lenders use two DTI ratios: front-end (housing costs only, ideally ≤28%) and back-end (all debts, ideally ≤36%). FHA loans may allow up to 43% back-end DTI, while conventional loans prefer 36% or less.
While 20% is ideal to avoid paying PMI (Private Mortgage Insurance), many loan programs allow lower down payments: FHA loans require only 3.5%, conventional loans can go as low as 3%, and VA/USDA loans offer 0% down for eligible borrowers.
This calculator estimates PITI (Principal, Interest, Taxes, Insurance) and HOA. Additional costs like closing costs (typically 2-5% of home price), maintenance (budget 1% of home value/year), utilities, and moving expenses are not included.
No. Financial experts recommend buying below your maximum to maintain financial flexibility. Unexpected expenses, job changes, and lifestyle costs mean that stretching to your limit can lead to being "house poor" — where too much income goes to housing, leaving little for savings and emergencies.