Home Affordability Calculator

"How much house can I afford?" has two answers: what a lender will approve, and what won't quietly own your life. This calculator gives you both — it applies the same debt-to-income (DTI) ratios underwriters use, works backward through the full PITI payment (taxes, insurance and PMI included), and shows a comfort ladder from "sleep well" to "maximum approval."

The Two Ratios That Decide Everything

Whichever ratio binds first sets your ceiling. This is why existing debts are so expensive in house terms: every $100/month of car payment or student loan erases roughly $15,000 of home price at current rates. Sometimes the best first move in house shopping is paying off a car — the Debt Payoff Calculator quantifies it.

Worked Example

$95,000 income ($7,917/mo), $450/mo of debts, $40,000 down, 6.75%/30yr, standard profile (31/43): housing budget = min(31% × 7,917, 43% × 7,917 − 450) = $2,454/mo. Solving the full PITI equation backward: about a $317,000 home — with the 12.6% down payment triggering PMI that the tool includes automatically.

Approved-For vs Comfortable-With

Lenders approve to the edge of the ratios because their risk ends if you can barely pay; yours begins there. The comfort ladder in the results exists for that reason:

• 25% of income: room for aggressive saving, childcare, a career risk — the "wealth-building" setting.
• 28%: the classic banker's rule; balanced for most households.
• 31–36%: workable with stable income, no childcare shock incoming, and a funded emergency reserve.
• Above 36%: approval-maximum territory — historically where payment stress and foreclosure risk concentrate.

What Moves Your Number the Most

1. Interest rate: each 1% of rate swings buying power ~10%. A rate buydown or a better credit tier (see the Credit Score Estimator) is house money.
2. Monthly debts: $15k of price per $100/mo, as above.
3. Down payment: adds price dollar-for-dollar — and crossing 20% kills PMI, which adds several thousand dollars of price on its own.
4. Property tax rate: a Texas-vs-Colorado difference of 1.2%/yr changes the affordable price by tens of thousands at the same payment.

How to Use the Calculator

1. Enter gross annual income (before taxes — lenders use gross), your real monthly debt payments (cards' minimums, car, student loans — not utilities), and down payment saved.
2. Set the rate you've been quoted and choose a lending profile.
3. Read the headline price, then the comfort ladder — and pick your number from the ladder, not from the lender's ceiling.

Frequently Asked Questions

What counts as 'monthly debts' for DTI?

Recurring credit obligations: minimum card payments, car loans/leases, student loans, personal loans, child support. Not utilities, insurance, phone plans, groceries or subscriptions — lenders exclude those, which is exactly why their maximum can exceed your comfort.

Is this what a lender will pre-approve me for?

It's a close estimate of the standard math, but pre-approval adds credit-score pricing, income verification and program specifics. Expect this tool's 'Stretch' figure to land near a typical pre-approval; walk in knowing it rather than learning it.

Should I include my partner's income?

If you'll both be on the loan, yes — and include both sets of debts. Single-income affordability with dual-income living is the conservative play some couples deliberately choose.

How much down payment do I really need?

Conventional loans go as low as 3% down (with PMI), FHA 3.5%. Twenty percent avoids PMI but is not a requirement — waiting years to save it while prices rise often costs more than PMI does. The calculator prices PMI in automatically.

Why does the tool assume 1.1% property tax and $150 insurance?

National averages, used to keep the reverse calculation honest. In a high-tax state the same payment buys meaningfully less house — check your county rate with the Property Tax Estimator and mentally adjust.

Do student loans in deferment count?

Lenders count them anyway — typically 0.5–1% of the balance as a monthly payment even at $0 actual. Include a realistic figure or your pre-approval will surprise you in the wrong direction.

Is my financial data private?

Yes — income, debts and savings are processed locally in your browser and never leave your device.

Buy at a number from the comfort ladder and the house funds your life; buy at the approval ceiling and your life funds the house. With your price range set, the PITI Payment Calculator details the monthly cost and the Down Payment Savings Calculator plans the cash timeline.