Question 1

How much house can I afford on my income?

Accepted Answer

Many lenders start from the 28/36 rule: housing costs up to 28% of gross monthly income, and all debts including housing up to 36%. On a $100,000 salary ($8,333 a month) with $500 of other debt payments, the housing limit is $2,333 and the total-debt limit leaves $3,000 − $500 = $2,500, so the lower figure of $2,333 sets the budget. This calculator converts that budget into a maximum home price.

Question 2

What is a debt-to-income (DTI) ratio?

Accepted Answer

DTI compares monthly debt payments with gross monthly income. The front-end ratio counts only housing costs: principal, interest, property tax, insurance, PMI and HOA fees. The back-end ratio adds car loans, student loans, card minimums and other debts. Conventional guidelines start at 28/36, automated underwriting can approve back-end ratios up to about 45% to 50% for strong borrowers, and FHA's standard guideline is 31/43.

Question 3

How much do I need for a down payment?

Accepted Answer

Some conventional loans allow as little as 3% down, FHA loans require 3.5% with a credit score of 580 or higher, and VA and USDA loans can need no down payment for eligible borrowers. With less than 20% down on a conventional loan you usually pay private mortgage insurance (PMI), often about 0.3% to 1.5% of the loan per year. You can ask to cancel PMI at 20% equity, and it ends automatically at 22% equity on the original schedule.

Question 4

What costs are included in the monthly payment?

Accepted Answer

This calculator includes principal and interest, property tax, homeowners insurance, PMI when your down payment is under 20%, and HOA fees. Lenders count all of these toward your DTI. Outside the payment, also budget for closing costs of roughly 2% to 5% of the price, utilities, and maintenance of about 1% to 2% of the home's value each year.

Question 5

How do interest rates affect how much house I can afford?

Accepted Answer

Higher rates shrink the loan a given payment can support. With $2,000 a month for principal and interest on a 30-year loan, you can borrow about $333,600 at 6% but only about $300,600 at 7%, roughly 10% less. The rate table and chart in this calculator show your maximum price at nearby rates.

Interest Rate	Max Home Price	Principal & Interest	vs Your Rate
4.50%	$392,124	$1,683	+$53,820
5.00%	$377,372	$1,704	+$39,068
5.50%	$363,519	$1,723	+$25,215
6.00%	$350,513	$1,742	+$12,209
6.50%your rate	$338,304	$1,759	—
7.00%	$326,842	$1,775	−$11,462
7.50%	$316,081	$1,791	−$22,223
8.00%	$305,974	$1,805	−$32,330
8.50%	$300,000	$1,845	−$38,304

Home Affordability Calculator

Income and Savings

Loan and Housing Costs

Your Debt-to-Income Ratios

Affordability at Different Interest Rates

How Lenders Decide

The Math

Before You Buy

Frequently Asked Questions