Compute the home price you qualify for based on income, debts, down payment, and standard lender DTI guidelines.
Maximum home price you can afford
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Max monthly PITI
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Max loan amount
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What "affordable" means to a lender, and why it is not what you can comfortably pay
Mortgage underwriters do not ask whether a house feels affordable. They run two ratios. The front-end ratio caps your total housing payment, principal, interest, property taxes, and insurance, known together as PITI, at around 28% of your gross monthly income. The back-end ratio caps all your monthly debt, housing plus car loans, student loans, and credit card minimums, at roughly 36%. The smaller of those two limits is the ceiling on what a conventional lender will approve. This calculator works backward from those limits, factors in your down payment and local tax and insurance rates, and solves for the maximum home price you qualify for.
Because the housing payment includes taxes and insurance, not just the loan, a higher property tax rate directly shrinks the price you can afford. The tool runs an iterative solve, adjusting the home price until the full PITI lands right at your allowed payment, which is why it captures the tax-and-insurance drag that simpler loan calculators miss.
From income to a maximum price
The calculation starts with the two DTI caps, picks the binding one, and converts that monthly budget into a loan and a price. Your down payment is added to the loan the lender will finance to reach the total purchase price.
A $120,000-earner with $80,000 down
Take a buyer with $10,000 in gross monthly income, $500 of existing monthly debt, and $80,000 saved for a down payment, shopping a 30-year loan at 6.5% with a 1.2% property tax rate and 0.4% insurance. Here is how the tool arrives at the answer.
| Step | Result |
|---|---|
| Front-end cap (28% of $10,000) | $2,800/mo |
| Back-end cap (36% of $10,000 minus $500 debt) | $3,100/mo |
| Binding PITI budget (the lower cap) | $2,800/mo |
| Max loan amount solved from that budget | $352,088 |
| Max home price ($352,088 loan plus $80,000 down) | $432,088 |
That $2,800 budget covers about $2,225 of principal and interest plus roughly $576 of monthly taxes and insurance. The down payment of $80,000 on a $432,088 home is an 81% loan-to-value ratio, which sits just under the threshold that triggers private mortgage insurance. The chart shows the budget splitting into loan payment and escrow.
Borrow the maximum and you will feel it every month
The number this calculator produces is what a lender will allow, not what you should spend. Underwriting ratios are built on gross income, before taxes, retirement contributions, and health insurance leave your paycheck. Many planners suggest keeping housing under 25% of your take-home pay instead, which leaves room to save, invest, and absorb a surprise. There is also a cash trap to avoid: do not drain your down payment fund to the dollar. You still owe closing costs, typically 2% to 5% of the price, plus moving expenses and a reserve for the inevitable first repairs. A buyer who spends every cent on the down payment often moves into a house with no emergency fund, which is how a manageable mortgage turns into a stressful one.
Who should use this calculator?
First-time and move-up buyers who want a realistic price range before they start touring homes or talking to lenders. Knowing your DTI-based ceiling keeps you from falling for a house above your budget and gives you a number to compare against any pre-approval letter.
How does my down payment change what I can afford?
A larger down payment raises your maximum price dollar for dollar, since the price equals the loan you qualify for plus the cash you put down. It also affects the monthly cost in two ways: crossing 20% down removes private mortgage insurance, and a bigger down payment means a smaller loan and lower interest. Run the tool with different down payment amounts to see the price move.
Do FHA or VA loans change these limits?
Yes. The 28/36 figures reflect conventional underwriting. FHA loans often allow back-end ratios up to 43% or even higher with compensating factors, and VA loans use a residual-income test that can permit more. Those programs let you stretch further, but the same caution applies: approval is not the same as affordability.