Calculate exactly how much house you can afford using actual lender DTI guidelines. Enter your household income, debts, and down payment to get three personalized home price tiers — Conservative, Recommended, and Maximum — each with a full PITI breakdown including principal, interest, taxes, insurance, and PMI.
// HOUSEHOLD INCOME
Lenders combine income from all co-borrowers on the mortgage application. All earners must be listed on the loan.
// MONTHLY DEBT PAYMENTS
// DOWN PAYMENT
// LOAN DETAILS
// HOUSING COST ESTIMATES
U.S. average is 1.07% — adjust for your state.
// HOUSING EXPENSE RATIO
Conventional standard: 28% front-end / 43% back-end DTI maximum.
Your existing debts are setting your ceiling — not the housing slider. All three tiers are limited by the back-end DTI ratio (total debts ÷ income), so moving the front-end slider has no effect until your debt load is reduced.
Comfortable payments with room for savings, emergencies, and life expenses.
MAX HOME PRICE
$0
Meets lender guidelines and industry recommendations for most borrowers.
MAX HOME PRICE
$0
Upper limit of lender approval — leaves less monthly buffer.
MAX HOME PRICE
$0
* Take-home estimate assumes ~25% effective tax rate.
Each loan type sets its own minimum credit score and down payment requirements. The table below shows the typical baseline for each — actual lender overlays may be stricter, especially in tighter markets.
| Loan Type | Min. Credit Score | Min. Down Payment |
|---|---|---|
| Conventional | 620 (680+ for best rates) | 3% (20% avoids PMI) |
| FHA | 580 (3.5% down) / 500 (10% down) | 3.5% |
| VA | No minimum (lenders typically want 620) | 0% |
| USDA | 640 preferred | 0% (rural properties) |
| Jumbo | 700+ | 10–20% |
Beyond the down payment, plan for closing costs of roughly 2–5% of the loan amount. On a $400,000 home with 10% down, that's an additional $7,200–$18,000 in cash you'll need at closing on top of your $40,000 down payment.
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Mortgage lenders don't guess. They run two specific debt-to-income (DTI) ratios on every application and qualify you on whichever number is lower. Understanding both ratios is the difference between knowing what you can afford and finding out at the closing table.
The first is the front-end ratio — your total housing cost divided by gross monthly income. Housing cost here means PITI: Principal, Interest, Taxes, and Insurance, plus PMI and HOA fees if they apply. Conventional lenders cap this at 28%. FHA allows up to 31%.
The second is the back-end ratio — total monthly debt obligations divided by gross monthly income. This includes the proposed housing payment plus car loans, student loans, credit card minimums, alimony, child support, and any other recurring debt. Conventional lenders prefer this below 36%, with hard caps at 43–45% with compensating factors. FHA can stretch to 50% in some cases.
Both ratios must be satisfied. The lower of the two results determines your maximum approved home price. This calculator runs both, automatically — every tier you see has already passed the same dual-ratio test a real underwriter would apply.
The 28/36 rule is shorthand for the conventional-loan version of the dual ratio test. 28% is the front-end limit; 36% is the preferred back-end limit. On a $100,000 income — $8,333 per month gross — these translate to:
The 28% guideline traces back to Fannie Mae and Freddie Mac underwriting standards. It exists because borrowers spending more than that on housing have historically defaulted at noticeably higher rates. The 36% back-end accounts for the reality that even people who can afford the house still need money for everything else — food, transportation, retirement, emergencies. Pushing past 36% is possible but compresses every other line in your monthly budget.
Your down payment affects affordability in two distinct ways. First, every dollar down is a dollar you don't borrow — which directly reduces your monthly principal and interest payment. Second, hitting 20% down eliminates private mortgage insurance (PMI), which typically runs 0.5–1.5% of the loan amount per year.
On a $300,000 home, the difference between 10% and 20% down isn't just $30,000 of cash — it's also roughly $150–$250/month in PMI that disappears from your payment. That freed-up cash flow translates directly into more home you can qualify for under the same DTI rules.
The table below shows estimated home prices at common income levels using the standard 28% front-end ratio, 7% interest rate, 30-year term, and 20% down payment with no existing debts.
| Annual Income | Monthly Gross | Conservative | Recommended | Maximum |
|---|---|---|---|---|
| $50,000 | $4,167 | $140,000 | $175,000 | $215,000 |
| $75,000 | $6,250 | $210,000 | $260,000 | $320,000 |
| $100,000 | $8,333 | $280,000 | $350,000 | $430,000 |
| $125,000 | $10,417 | $350,000 | $440,000 | $540,000 |
| $150,000 | $12,500 | $420,000 | $525,000 | $645,000 |
| $200,000 | $16,667 | $560,000 | $700,000 | $860,000 |
Existing debts are the single biggest variable most buyers underestimate. A $500/month car payment doesn't sound like much, but on a $75,000 income it pulls roughly $50,000–$70,000 out of your maximum home price under the back-end DTI rule. Student loans and credit card minimums work the same way.
Credit score moves your interest rate, which moves your monthly payment, which moves your qualifying home price. The gap between a 620 score and a 760 score can easily be a full percentage point of interest — which on a $300,000 loan is about $200/month in extra payment, and around $30,000–$40,000 in maximum home price.
Small down payments compound the problem because they trigger PMI, which counts against your DTI just like principal and interest. Saving an extra few thousand to clear the 20% threshold can unlock more home than the savings itself implies.
On a $75,000 annual salary with no existing debts, 20% down payment, and a 7% mortgage rate, you can generally afford a home priced between $220,000 and $290,000 using the standard 28% front-end ratio guideline. Your gross monthly income is approximately $6,250, which allows for a maximum PITI payment of about $1,750. This translates to a loan amount of roughly $220,000–$240,000 plus your down payment. Keep in mind that existing debts like car payments or student loans will reduce this amount, as lenders also evaluate your total debt-to-income ratio.
The 28/36 rule is the standard guideline used by conventional mortgage lenders to determine how much home you can afford. The "28" means your monthly housing costs — including principal, interest, property taxes, and insurance — should not exceed 28% of your gross monthly income. The "36" means your total monthly debt payments, including your housing costs plus all other debts, should not exceed 36% of your gross monthly income. Both ratios must be satisfied, and the lower result determines your maximum home price. For example, on a $100,000 annual income, the 28% rule allows up to $2,333 in monthly housing costs, while the 36% rule allows up to $3,000 in total monthly debts.
With a $100,000 annual salary, no existing debts, 20% down payment, and current mortgage rates around 7%, most lenders would approve you for a home priced between $330,000 and $400,000. Using the 28% front-end ratio, your maximum monthly PITI payment is approximately $2,333, which supports a loan amount of roughly $295,000–$310,000. Adding a 20% down payment increases your purchasing power to approximately $370,000–$390,000. If you carry existing debts, this figure will decrease based on your total debt-to-income ratio.
Most financial experts and lenders recommend spending no more than 28% of your gross monthly income on housing costs, including principal, interest, property taxes, and insurance. This is known as the front-end ratio or housing expense ratio. A more conservative approach is to keep housing at 25% or less of your take-home (after-tax) pay, which leaves more room for retirement savings, emergency funds, and other financial goals. Spending more than 30% of gross income on housing is generally considered "cost burdened" by the U.S. Department of Housing and Urban Development.
A debt-to-income (DTI) ratio for a mortgage is the percentage of your gross monthly income that goes toward debt payments. Lenders use two DTI ratios: the front-end ratio (housing costs only, maximum 28% for conventional loans) and the back-end ratio (all debts combined, maximum 43% for conventional loans). To calculate your DTI, divide your total monthly debt payments by your gross monthly income and multiply by 100. For example, if you earn $6,000 per month and have $2,000 in total monthly debt payments, your DTI is 33%. Most conventional lenders prefer a back-end DTI below 36%, though they may approve up to 43–45% with strong compensating factors like excellent credit or substantial savings.
To afford a $300,000 house comfortably, you generally need a gross annual income of at least $75,000 to $85,000, assuming a 20% down payment ($60,000), a 7% mortgage rate, and no significant existing debts. On a $240,000 loan (after down payment), your monthly principal and interest payment would be approximately $1,596. Adding property taxes and insurance brings the total PITI to roughly $1,900–$2,100 per month, which represents about 28% of an $82,000 annual income. If you have existing debts or plan to put less than 20% down, you would need higher income to qualify.
On a $50,000 annual salary with no existing debts and 10% down payment at a 7% mortgage rate, you can typically afford a home priced between $150,000 and $190,000. Your gross monthly income is approximately $4,167, which allows for a maximum housing payment of $1,167 at the 28% guideline. This supports a loan amount of roughly $145,000–$155,000. Adding your down payment brings the total purchase price to approximately $160,000–$175,000. In high cost-of-living areas this may limit your options significantly, making FHA loans, down payment assistance programs, or additional household income worth exploring.
Yes, your down payment directly affects how much home you can afford in two significant ways. First, a larger down payment reduces your loan amount, which lowers your monthly principal and interest payment and allows you to qualify for a higher-priced home within the same DTI limits. Second, putting down 20% or more eliminates the requirement for private mortgage insurance (PMI), which typically costs 0.5% to 1.5% of the loan amount annually. Removing PMI from your monthly payment frees up additional qualifying power. For example, on a $300,000 home with 10% down, PMI might add $150–$250 per month to your payment, directly reducing the home price you can afford under lender guidelines.
Yes, combining incomes from two or more earners on a mortgage application significantly increases your home buying power. Lenders add all co-borrower incomes together to calculate your combined DTI ratio. For example, if one earner makes $60,000 and a second earner makes $55,000, the combined $115,000 household income supports a much higher home price than either income alone. Both borrowers' debts are also combined, so existing debts from both earners count against the qualifying ratio. All co-borrowers must be on the loan application, and each borrower's credit score is evaluated — the lender typically uses the lowest middle score among all borrowers for qualifying purposes.
Private mortgage insurance (PMI) is a monthly fee required on conventional loans when your down payment is less than 20% of the home's purchase price. PMI protects the lender if you default on the loan — it does not protect you as the borrower. PMI typically costs between 0.5% and 1.5% of the original loan amount per year, or roughly $50 to $150 per month on a $150,000 loan. PMI is automatically canceled when your loan balance reaches 80% of the home's original appraised value. You can request cancellation once you reach 80% LTV and can have it removed at 78% LTV under the federal Homeowners Protection Act.
With no down payment, VA loans and USDA loans are the primary options. VA loans are available to eligible veterans and active-duty military with no down payment required and no PMI. USDA loans offer zero down payment for eligible rural and suburban properties for borrowers within income limits. With either loan type, your qualifying home price is based entirely on your income and the monthly payment your DTI allows. On a $75,000 income with a VA loan at 7% and a 28% housing ratio, you could qualify for a home priced around $230,000–$250,000 with zero down. Conventional loans require a minimum 3% down payment and FHA loans require at least 3.5%.
To calculate how much house you can afford, follow these steps: First, multiply your gross monthly income by 0.28 to find your maximum monthly housing payment (PITI). Second, subtract estimated monthly property taxes (home price × 1.07% ÷ 12) and homeowner's insurance (home price × 0.5% ÷ 12). Third, if your down payment is less than 20%, subtract estimated PMI (loan amount × 0.85% ÷ 12). The remaining amount is your maximum principal and interest payment. Fourth, use a mortgage amortization formula or calculator to convert that payment into a maximum loan amount at your interest rate and loan term. Fifth, add your down payment to the loan amount to get your maximum home price. Also check the back-end ratio: your total monthly debts plus housing payment should not exceed 36–43% of gross monthly income.