Find out how much house you can actually afford based on your income and debts
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Enter your annual gross income (before taxes), any monthly debt payments you currently make (car loans, student loans, credit card minimums), and the amount you have available for a down payment. Then set the interest rate you expect and your target debt-to-income (DTI) ratio.
The DTI ratio is a key factor lenders use to determine how much you can borrow. The standard guideline is 36% of gross income for total debt payments, though some lenders allow up to 43%.
Lenders use two ratios to determine how much house you can afford. The front-end ratio limits housing costs (mortgage, taxes, insurance) to about 28% of gross income. The back-end ratio limits total debt payments to 36% of gross income.
This calculator uses your back-end DTI ratio to determine the maximum monthly payment you can afford, subtracts your existing debts, and works backward to find the maximum home price that fits within those limits.
Most lenders prefer a total DTI of 36% or less, though many will approve up to 43%. A lower DTI gives you more breathing room in your budget and makes you a stronger borrower.
Generally, no. Just because a lender will approve you for a certain amount doesn't mean you should borrow that much. A more conservative approach leaves room for savings, emergencies, and lifestyle expenses that lenders don't factor in.
This estimates your maximum based on the mortgage payment, taxes, and insurance. It doesn't account for maintenance (budget 1-2% of home value annually), utilities, furnishing, or unexpected repairs.
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