How this home affordability calculator works
Most "how much house can I afford" tools use a single rough multiple of your income. This one solves the actual math lenders use: the smaller of your front-end ratio (housing costs alone) and your back-end ratio (housing costs plus all other debt) — both capped as a percentage of your gross monthly income.
Because property tax, insurance, HOA, and PMI all scale with the home price you're solving for, this isn't a simple formula — it's solved iteratively, exactly like a lender's underwriting math, so the price you see is what your budget actually supports once every recurring cost is accounted for.
The 80% loan-to-value boundary
Below 20% down, conventional loans require PMI (private mortgage insurance), which adds a real monthly cost that eats into your housing budget. At exactly 20% down, PMI disappears — and for some incomes, that alone frees up enough room that neither DTI cap is actually what's limiting your price anymore. When that happens, this calculator tells you explicitly: your ceiling is the 20%-down, no-PMI boundary itself, not your income or debt.
What the calculator assumes
Mortgage rate, property tax rate, insurance, HOA, and PMI rate are all editable inputs with sane defaults — this calculator never fetches a "live" rate or your actual local tax rate. Use your own numbers, or a lender quote, for the most accurate result.
Frequently asked questions
How much house can I afford?
Affordability is the smaller of two limits: your front-end ratio (housing costs alone, typically capped at 28% of gross monthly income) and your back-end ratio (housing costs plus all other debts, typically capped at 36%). This calculator solves for the maximum home price under both caps simultaneously, accounting for property tax, insurance, HOA, and PMI — all of which scale with the price you're solving for.
What is the 28/36 rule?
The 28/36 rule is the standard conventional-loan guideline: your monthly housing payment (principal, interest, taxes, insurance) shouldn't exceed 28% of gross monthly income, and your total monthly debt (housing plus car loans, student loans, credit cards, etc.) shouldn't exceed 36%. FHA loans allow looser caps (31/43).
Why does my down payment change which cap binds?
Below 20% down, conventional loans require PMI, which eats into your housing budget and can make the front-end ratio bind sooner. At exactly 20% down, PMI drops off — sometimes this removes so much cost that neither DTI cap actually limits your price anymore, and the 80% loan-to-value boundary itself becomes the real ceiling. This calculator detects that case explicitly rather than misreporting it as a DTI limit.
Does paying off debt always increase how much house I can afford?
Only if your back-end ratio is the binding constraint. If your front-end (housing-only) ratio is what's capping your price, clearing other debt won't change the number — a lower rate, more income, or a bigger down payment will. This calculator tells you explicitly which one applies to your numbers.
Is this the same as a mortgage pre-approval?
No. This is a DTI-based estimate using the assumptions you enter — actual lender caps, credit-score-based pricing, and underwriting overlays vary by lender and loan program. Use this to understand your realistic range before you talk to a lender, not as a substitute for pre-approval.
Worked examples
Worked example 1
The $100k anchor scenario — front-end bound
$100,000 income, $500/mo other debts, $40,000 down, 6.5% rate. Standard 28/36 caps.
Max home price
$320,673
Binding constraint
front
PMI
$140/mo
Max price lands at $320,673, with the front-end (housing-only) ratio binding — meaning debt payoff would NOT move this number.
Worked example 2
The $80k debt-sensitive scenario — back-end bound
$80,000 income, $700/mo other debts, $20,000 down, 6.5% rate. Standard 28/36 caps.
Max home price
$221,189
Binding constraint
back
PMI
$101/mo
At $221,189, the back ratio binds. With $700/mo in other debts weighing on the back-end cap, clearing that debt is the single highest-leverage move at this income.
Worked example 3
The exactly-20%-down gap scenario — LTV-threshold, not DTI
$120,000 income, $400/mo other debts, $84,000 down (exactly 20% of the resulting price). Standard 28/36 caps.
Max home price
$420,000
Binding constraint
ltv-threshold
Here, neither DTI cap binds — the 20%-down, no-PMI boundary is the real ceiling at $420,000, with income room left over (comfort band: comfortable).
Max home price by income and down payment
Max home price by income and down payment
| Gross annual income ↓ / Down payment → | $10,000 | $40,000 | $80,000 |
|---|---|---|---|
| $60,000 | $160,676 | $197,286 | $232,220 |
| $80,000 | $233,914 | $260,360 | $310,517 |
| $100,000 | $294,227 | $320,673 | $374,998 |
| $120,000 | $354,541 | $380,987 | $416,248 |
| $150,000 | $445,011 | $471,457 | $506,718 |
| $200,000 | $595,795 | $622,241 | $657,502 |
Standard 28/36 caps, $500/mo other debts, 6.5% rate, 1.1% property tax, $1,500/yr insurance, 0.6% PMI.
Every cell is computed live from lib/home-affordability.ts at render time — never hand-typed.
What affects the result
Which DTI ratio binds
Front-end (housing-only) or back-end (total debt) — whichever is tighter for your specific numbers determines whether debt payoff, rate, or down payment is your highest-leverage lever.
Down payment relative to 20%
Crossing the 20%-down line removes PMI entirely, which can be worth $100–$300+ per month depending on loan size — sometimes enough to shift the binding constraint itself.
Mortgage rate
A 1-percentage-point rate change shifts the affordable loan amount by roughly 10%, all else equal — the single biggest lever at higher income and loan-size bands.
Other monthly debts
Matters enormously when the back-end ratio binds (common at lower incomes and higher debt loads), and not at all when the front-end ratio binds instead.
Property tax rate and insurance cost
Real but secondary — a 0.3-percentage-point property tax difference between two markets shifts affordability by a few percent, not the double-digit swings that rate or PMI status produce.
Common mistakes to avoid
- ✗Using a flat income multiple (like "3x salary") instead of solving the actual DTI ratios — this ignores debt load, rate, and down payment entirely and can be wrong by tens of thousands of dollars in either direction.
- ✗Assuming debt payoff always helps — it only helps when the back-end ratio is the binding constraint; if the front-end ratio binds, clearing debt does nothing to the max price.
- ✗Comparing a lender's "loan amount" pre-qualification to this tool's "home price" output without accounting for down payment — they differ by exactly the down payment amount.
- ✗Ignoring the PMI cliff at 20% down — the jump from 19% to 20% down removes a real, ongoing monthly cost, not a marginal one.
- ✗Treating this calculator (or any DTI-based estimate) as a substitute for an actual mortgage pre-approval, which also verifies income, assets, credit, and applies lender-specific overlays.
Practical takeaways
- ✓Check which ratio binds before deciding your next move — it tells you whether debt payoff, a bigger down payment, or a lower rate actually helps.
- ✓If you're within a few thousand dollars of 20% down, consider stretching to reach it — the PMI removal often outweighs the extra savings time required.
- ✓Use the conservative comfort band (25/33), not just the standard max (28/36), if you want real monthly breathing room alongside the mortgage.
- ✓Run the FHA preset if your back-end ratio is what's binding and your down payment is limited — the looser 43% cap can meaningfully raise your ceiling.
- ✓Treat this as a starting range, not a final number — get an actual rate quote and pre-approval once you're seriously shopping.
Key terms
- Front-end ratio (housing ratio)
- Monthly housing costs (principal, interest, property tax, insurance, PMI/MIP, HOA) divided by gross monthly income. Conventional lenders typically cap this at 28%; FHA allows up to 31%.
- Back-end ratio (total DTI)
- Monthly housing costs plus all other recurring debt payments (auto loans, student loans, credit cards) divided by gross monthly income. Conventional lenders typically cap this at 36%; FHA allows up to 43%.
- Binding constraint
- Whichever of the two DTI caps — front-end or back-end — is actually tighter for a given income and debt load. The binding constraint determines which lever (income, rate, down payment, or debt payoff) actually moves the max affordable price.
- PMI (private mortgage insurance)
- A monthly cost on conventional loans with less than 20% down, required to protect the lender against default risk. It cancels automatically once the loan balance reaches 78% of the home's original value, by law.
- FHA MIP (mortgage insurance premium)
- FHA's version of mortgage insurance — an upfront premium plus an ongoing annual premium. Unlike conventional PMI, it typically does not cancel automatically for loans with less than 10% down; it usually lasts the life of the loan in that case.
- Loan-to-value (LTV)
- The loan amount divided by the home's price. LTV above 80% (equivalent to less than 20% down) triggers PMI on conventional loans.
- LTV-threshold (the neither-branch gap)
- A rare case where neither DTI cap actually limits price — instead, the 80% loan-to-value / PMI-avoidance boundary does. This happens when income and debt leave enough room that the only thing keeping price from going higher is the PMI kink itself.
- PITI
- Principal, Interest, Taxes, and Insurance — the four components of a standard monthly mortgage payment (plus PMI/MIP and HOA where applicable). Affordability calculations cap PITI as a share of income, not principal and interest alone.
- Comfort band
- A three-state read on the result: 'comfortable' (clears the conservative 25/33 caps, or hits the LTV-threshold gap), 'at your limit' (uses the full standard 28/36 caps), or 'stretch' (only reachable via looser caps like FHA's 31/43).
- Escrow (in this context)
- Property tax, homeowners insurance, PMI/MIP, and HOA — the recurring costs beyond principal and interest that scale with home price, requiring the max-price calculation to be solved iteratively rather than looked up.
More questions answered
Does this calculator use a live or current mortgage rate?
No. Rate, property tax rate, insurance cost, PMI rate, and HOA are all user-editable inputs with sensible defaults — this calculator never fetches a live rate or assumes your local tax rate. Enter your own numbers, or a rate a lender has quoted you, for the most accurate result.
Why does the calculator show a PITI breakdown instead of just a price?
Because the max price alone hides the reason behind it. Seeing principal & interest, tax, insurance, and PMI separately shows exactly what's driving your monthly payment — and which of those costs would change if you adjusted your down payment, rate, or loan type.
What happens if my down payment is very close to 20%?
This is the one case where the math gets genuinely subtle: right at the 20%-down boundary, neither DTI cap may be what's actually limiting your price — the loan-to-value threshold itself becomes the ceiling. The calculator detects this explicitly and reports it as 'ltv-threshold,' not as a DTI limit, so you know there's income room to spare if you're willing to put down less than 20% and accept PMI.
Model assumptions & disclosures
Not a pre-approval. This calculator estimates your maximum home price using standard debt-to-income (DTI) caps against the income, debts, rate, and down payment you enter. It does not verify income, assets, credit, or employment, and it is not an offer or commitment from any lender. Actual mortgage pre-approval requires full lender verification and may differ from this estimate.
DTI caps are lender-dependent. The 28/36 (conventional) and 31/43 (FHA) caps used as defaults are common industry guidelines, not universal rules. Individual lenders, loan programs, and automated underwriting systems can approve — or require — different ratios based on credit score, cash reserves, loan-to-value, and other compensating factors not modeled here.
Rate, tax, insurance, and PMI are your estimates, not live data. This calculator never fetches a current mortgage rate, your actual local property tax rate, or a real insurance quote. Defaults are reasonable national approximations — enter your own numbers, or figures a lender or insurer has actually quoted you, for an accurate result.
Credit score is not modeled. Your interest rate — which directly drives your monthly payment and therefore your DTI — depends on your credit score and the specific loan program. This calculator assumes whatever rate you enter; it does not estimate what rate you would actually qualify for.
Not financial or legal advice. This calculator provides illustrative estimates based on your inputs. It does not account for your complete financial picture, local market conditions, or individual circumstances. Consult a qualified mortgage lender, financial advisor, or housing counselor before making a home-purchase decision.