Home Affordability Calculator
Lenders cap your loan at a maximum debt-to-income ratio. This works backward from your income, monthly debts, and down payment to the highest home price that keeps you under that ceiling.
Maximum home price
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Enter your details and calculate.
Uses the back-end DTI rule: total monthly debt (housing plus other debts) divided by gross income must stay under your DTI cap. Many conventional loans allow up to 43%–50% with strong credit.
How lenders decide what you can afford
When you apply for a mortgage, the single most important number an underwriter looks at is your debt-to-income ratio, or DTI. It's the share of your gross monthly income that goes toward all your debt payments. Lenders use it to gauge whether you can comfortably take on a mortgage on top of what you already owe.
There are two versions. The front-end ratio looks only at the housing payment. The back-end ratio — the one most lenders underwrite to — includes the housing payment plus every other monthly debt: car loans, student loans, minimum credit-card payments, and so on. This calculator uses the back-end ratio because it's the binding constraint for most borrowers.
The math behind the maximum price
The calculator first finds the largest total housing payment your income allows:
That payment has to cover principal, interest, property tax, insurance, and HOA — and since property tax scales with the home's price, the tool solves for the price where everything fits exactly:
÷ (f + monthly tax rate)
where f = the monthly payment per $1 of loan at your rate
The result is the highest price at which your full monthly payment lands right at your DTI ceiling. In practice you'll usually want to aim below the maximum to leave breathing room.
Why your real number may differ
- Credit score and program. Conventional, FHA, and VA loans allow different DTI limits, and stronger credit unlocks higher caps.
- PMI. If your down payment is under 20%, private mortgage insurance adds to the monthly payment and lowers the price you qualify for. (See our PMI calculator.)
- Reserves and other factors. Lenders also look at cash reserves, employment history, and the property type.
Frequently asked questions
What DTI should I use?
43% is a common conventional ceiling, and many lenders go to 45%–50% with compensating factors like strong credit or large reserves. A more conservative 36% leaves more comfort in your budget.
Does a bigger down payment raise the price I can afford?
Yes — it directly increases the maximum price, because the down payment is added on top of the loan you can support, and a larger down payment can also help you avoid PMI.
Should I borrow the maximum?
Usually not. The maximum is the lender's ceiling, not a target. Buying below it leaves room for maintenance, emergencies, and rate changes on taxes or insurance.