How much house can I afford?
Affordability is not a single number. It is the smaller of two limits: the payment your income supports on its own, and the payment your income supports after every other debt you already owe. This calculator applies both, then shows the full payment — taxes, insurance, PMI and HOA included — behind the price it returns.
Your numbers
Ratio limits default to the conventional 28/43 underwriting guideline. Raise the total debt ratio to 45–50% to see what an aggressive approval looks like, or lower both to model a payment you would actually be comfortable carrying.
Estimated home price you can afford
$345,433
Based on a housing budget of $2,567 per month, limited by your housing ratio.
- Down payment needed
- $34,543
- Loan amount
- $310,890
- Principal & interest
- $1,965
- Property taxes
- $317
- Homeowners insurance
- $130
- Mortgage insurance (PMI)
- $155
- HOA dues
- $0
- Total monthly payment
- $2,567
- Resulting total debt-to-income
- 35.1%
Monthly payment breakdown at this price
- Principal & interest$1,96577%
- Property taxes$31712%
- Homeowners insurance$1305%
- Mortgage insurance (PMI)$1556%
Estimate only. PMI is modeled at 0.6% of the loan per year when the down payment is under 20%; your actual quote depends on credit score and loan type.
The two ratios that decide your limit
Underwriters convert your income into two ceilings. The housing ratio (sometimes called the front-end ratio) is the share of gross monthly income that the housing payment may consume. The total debt ratio (back-end) is the share that the housing payment plus every other required monthly debt payment may consume. The traditional pairing is 28% and 43%, and your affordable price is set by whichever ceiling you hit first.
This matters because the two limits behave differently. A buyer with no other debts is almost always capped by the housing ratio, so paying down cards will not raise their number. A buyer with a $700 car payment and student loans is capped by the total debt ratio, where every $100 of debt removed frees $100 of housing budget — which at 6.5% over 30 years is roughly $13,000 to $16,000 of extra purchase price.
A worked example
Take a household earning $110,000 a year, or $9,167 gross per month, with $650 in other monthly debt payments, 10% down, a 6.5% rate on a 30-year term, a 1.1% property tax rate, 0.45% insurance and no HOA dues.
| Step | Figure |
|---|---|
| Gross monthly income | $9,167 |
| Housing ratio ceiling at 28% | $2,567 per month |
| Total debt ceiling at 43%, less $650 of debts | $3,292 per month |
| Binding limit (the smaller of the two) | $2,567 per month |
| Escrow and PMI absorbed by that budget | roughly $560 per month |
| Left for principal and interest | roughly $2,007 per month |
| Supported home price at 10% down | about $353,000 |
Notice what happens if this household clears the $650 of debt: the total debt ceiling rises, but the housing ratio still caps them at $2,567, so the affordable price barely moves. If instead they raise the down payment to 20%, PMI disappears and more of the same budget goes to principal and interest — pushing the supported price up by roughly $30,000 to $40,000. Where your constraint sits determines which lever actually works.
Costs the qualifying ratios ignore
- Maintenance and repairs. Budget about 1% of the home's value per year. On a $350,000 house that is roughly $290 a month that no underwriter counts.
- Tax reassessment. In many states the assessed value resets to your purchase price after closing, so the seller's old tax bill understates yours. Model the rate against your price, not their assessment.
- Insurance volatility. Premiums in coastal and wildfire-exposed markets have risen far faster than general inflation. A quote obtained today can be materially higher at renewal.
- Utilities and commuting. A larger or older home costs more to heat and cool, and a cheaper house farther out often trades mortgage savings for fuel and time.
- Cash reserves. Spending your entire down payment fund leaves nothing for a failed HVAC unit in month three. Keep several months of payments aside.
Frequently asked questions
What debt-to-income ratio do lenders actually allow?
Conventional underwriting is usually comfortable to 43% total debt-to-income, and automated approvals frequently stretch to 45–50% when there are strong compensating factors such as large reserves or a high credit score. FHA files often approve above 50% with an automated approval. The older 28% housing ratio is a guideline rather than a hard cap, but it remains a good comfort test.
Which debts count toward the ratio?
Anything with a required monthly payment on your credit report: auto loans, student loans, minimum credit card payments, personal loans, child support and alimony. Utilities, groceries, insurance premiums other than homeowners, phone bills and retirement contributions do not count, even though they clearly affect what you can afford.
Why is the calculator's answer lower than my pre-approval letter?
Pre-approvals are typically written at the maximum ratio the automated system accepted, and often assume a lower property tax rate and no HOA dues. This tool includes taxes, insurance, PMI and HOA in the payment, so the resulting price is closer to what you can carry without straining.
Does a bigger down payment increase how much house I can buy?
Yes, in two ways. It reduces the loan for a given price, which lowers principal and interest, and once you reach 20% it removes PMI entirely. Moving from 5% to 20% down often raises the affordable price by 15–20% at the same monthly budget.
Should I borrow the maximum I qualify for?
Rarely. Qualifying ratios ignore childcare, commuting, retirement saving and maintenance, which typically runs 1% of the home's value per year. Many buyers set their own ceiling around 25% of gross income for housing and treat the approval number as a limit they choose not to reach.
How does the interest rate change affordability?
Sharply. Each one percentage point of rate changes principal and interest by roughly 10–12% on a 30-year loan, so a move from 6.5% to 7.5% cuts the affordable price by about 9–10% at the same payment. Rerun the numbers whenever your quoted rate moves.
Methodology
The calculator converts your annual income to a monthly figure, applies both ratio ceilings, subtracts existing debts from the total debt ceiling, and takes the smaller result as your housing budget. It then solves algebraically for the home price whose principal and interest, property taxes, homeowners insurance, PMI and HOA dues exactly consume that budget. Principal and interest use the standard amortization formula; taxes and insurance are modeled as annual percentages of the purchase price; PMI is estimated at 0.6% of the loan per year and removed at 20% down. Results are estimates for education, not a loan approval or an offer of credit.