Home Affordability Calculator
Find your true maximum home price using both the front-end (28%) and back-end (43%) DTI rules — the same standards mortgage lenders use. Includes full PITI breakdown with property tax, insurance, and HOA.
Monthly Payment Breakdown
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Your DTI Ratios at Recommended Max
How Lenders Determine How Much House You Can Afford
Banks and mortgage lenders don't use take-home pay or a simple income multiplier to determine how much they'll lend. They use two debt-to-income (DTI) ratios that compare your gross monthly income against your monthly obligations.
The front-end ratio (housing ratio) compares monthly housing costs — principal, interest, property tax, homeowner's insurance, and HOA (PITI) — to gross monthly income. The conventional limit is 28%. On $8,000/month gross income, maximum PITI is $2,240.
The back-end ratio (total debt ratio) compares all monthly debt payments — housing plus car loans, student loans, credit card minimums, and other installment debts — to gross income. The conventional limit is 43%. At $8,000/month income with $500 in other debts, the maximum housing payment under the back-end rule is $8,000 × 43% − $500 = $2,940.
Your true maximum home price is determined by whichever limit produces the lower housing payment — the binding constraint. With no other debts, the front-end rule usually binds. With significant student loans or car payments, the back-end rule often binds first.
What Counts (and Doesn't Count) as Debt for DTI
Lenders count minimum monthly payments on: auto loans, student loans, credit card minimums (even if you pay in full), personal loans, other mortgage payments, and child support or alimony. They do NOT count utilities, phone, streaming, groceries, or non-debt insurance. Debts with fewer than 10 months remaining are often excluded by lenders.
Once you know your maximum home price, factor in closing costs (typically 2%–5% of the purchase price, due at closing) using the closing cost calculator. And if you're comparing rates with different point options, the mortgage points calculator shows exactly when buying down your rate pays off.
Frequently Asked Questions
How much house can I afford on a $100,000 salary?
At $100,000/year ($8,333/month gross) with no other debts, 6.8% rate, 30-year term, 20% down, 1.1% tax, and 0.5% insurance, the front-end rule allows approximately $415,000–$440,000. With $500/month in other debts, the back-end rule may bind and the maximum drops to around $380,000–$410,000. Enter your specific numbers above for a precise figure.
What DTI do I need to qualify for a mortgage?
Most conventional lenders require back-end DTI at or below 43%. FHA loans allow up to 43% (sometimes higher with strong compensating factors like high credit score or large reserves). The best rates and widest lender choice go to borrowers with back-end DTI below 36%. Above 43%, your options narrow significantly.
Should I buy the maximum home my DTI allows?
Almost never. Lenders tell you what they'll approve, not what's financially comfortable. Most financial planners recommend keeping housing costs at or below 25% of gross income — more conservative than the 28% limit — to preserve monthly flexibility for savings, travel, and unexpected expenses. Being "house poor" is one of the most common and financially painful situations in personal finance.
Does this include PMI?
No — add your estimated PMI to the HOA/Other field to include it. PMI typically costs 0.5%–1.5% of the loan amount per year (divide by 12 for monthly). On a $300,000 loan at 1%, that's $250/month. PMI cancels automatically when the loan balance reaches 80% of the original appraised value.
What other costs should I budget for beyond the down payment?
Closing costs typically add 2%–5% of the purchase price, due at closing — use the closing cost calculator for an itemized estimate. Also budget for moving costs ($1,000–$5,000+), immediate repairs or furnishings, and ongoing maintenance (1%–2% of home value per year as a long-run average).