How much house can you afford?
Lenders work backward from your income: total monthly debts, including the new house payment, must stay under a share of gross income.
How much house can I afford on my income?
Lenders set how much house you can afford by keeping total monthly debts, including the new house payment, under a share of gross income. With $9,000 a month in gross income, $650 in other debts and $60,000 down at 6.5%, a 43% debt-to-income limit supports a home price of about $453,911, with a total housing payment of $3,220/mo.
The housing payment covers principal, interest, property taxes, insurance, HOA dues and, under 20% down, mortgage insurance.
How much house can you afford?
Down payment is 13% of the price. Includes an estimate for mortgage insurance at 0.5% a year.
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How the calculator works
It finds the highest home price where your total housing payment (principal, interest, property tax, insurance and HOA dues) plus other debts stays within the debt-to-income limit you choose. It uses your down payment to set the loan amount and your rate to set the payment.
Choosing a DTI limit
- 36%: a comfortable traditional guideline.
- 43%: a common upper limit for many loans.
- 45%–50%: possible with strong credit or reserves on conventional loans, and higher on FHA with compensating factors.
Lenders approve based on gross income. Your budget runs on take-home pay. Check that the payment works after taxes, savings and childcare.
Costs it doesn't include
- Mortgage insurance on loans with less than 20% down.
- Maintenance: often 1% of the home's value a year.
- Closing costs, usually 2%–5% of the price.
- Mello-Roos or special assessments in some California communities.
Loan options: conventional, FHA, VA, down payment assistance.
Questions people ask
Which debt-to-income limit should I use to estimate home affordability?
43% is a common ceiling. FHA and strong conventional files can go higher. 36% is a comfortable budget even if you qualify for more.
Does the home affordability calculator include mortgage insurance?
Yes, at an estimated 0.5% a year when you put down less than 20%. FHA, VA and USDA price it differently. Loan types.
Can down payment assistance help me afford a home?
Yes, down payment assistance can cover part of the down payment and closing costs, which lowers the cash you need to bring when you buy a home.
Example
A couple earning $9,000 a month with $650 in other debts and $60,000 down at 6.5%. At 43%, the calculator shows a price around the amount in the example above. At 36%, the comfortable price is noticeably lower. Adding Mello-Roos taxes on a newer community home lowers it further.
Also asked
Should I buy a home at the maximum price a lender would approve?
Not necessarily. The maximum is what a lender might approve, not what fits your life. Many buyers aim for a payment that leaves room for savings, retirement contributions and surprises. Try the 36% limit to see a more comfortable price.
How does a bigger down payment change how much house I can afford?
Each extra dollar down lowers the loan and the payment, and with 20% down, conventional loans drop mortgage insurance. It also can lower your rate. Try adding $20,000 to see how the price changes.
What rate should I use?
Use a current quote if you have one. Otherwise, use a conservative estimate, and run it again half a point higher in case rates move before you lock.
Does the home affordability calculator use gross or take-home pay?
The home affordability calculator uses gross monthly income, the way lenders qualify you. Your real budget runs on take-home pay, so check the suggested payment against your take-home pay and fixed expenses; if it leaves little room for savings, aim lower.