Enter your income, debts, and down payment. We apply the 28/36 DTI rules used by most conventional lenders to find your realistic maximum home price.
Estimates only. Assumes conventional fixed-rate loan. Actual approval depends on credit score, lender guidelines, and full underwriting. FHA loans allow higher DTI. Consult a licensed mortgage professional for a formal pre-qualification.
Your total monthly housing cost (PITI) should not exceed 28% of your gross monthly income. This is the standard conventional lender threshold for housing expense ratio.
All monthly debt payments combined — including housing, car loans, student loans, and credit cards — should stay below 36% of gross monthly income for conventional loans.
FHA loans allow a back-end DTI up to 43%, and with compensating factors (strong credit, large reserves) even higher. If your DTI is above 36%, exploring FHA financing may expand your options.
Putting 20% down eliminates PMI (Private Mortgage Insurance), which can add $100–$300/month. Our calculator applies PMI automatically when your down payment is below 20%.
Mortgage affordability comes down to your debt-to-income (DTI) ratio — the percentage of your gross monthly income that goes toward debt payments. Most conventional lenders cap the "front-end" ratio (housing costs alone: principal, interest, taxes, insurance) around 28% of gross income, and the "back-end" ratio (housing plus all other debt — car loans, student loans, credit cards) around 36-43%, though some loan programs allow higher back-end ratios for well-qualified borrowers. This calculator applies those standard thresholds to your income and existing debts to estimate a realistic home price range.
Two households with identical income can qualify for very different loan amounts depending on existing debt, down payment size, credit score, and current interest rates. Getting pre-approved (not just pre-qualified) with an actual lender is the only way to know your real number — this calculator gives you a starting point for house-hunting, not a loan commitment.
The maximum price this calculator shows you is the number a lender's underwriting formula would approve based on your income and debts — not necessarily the number that leaves you comfortable month to month. Underwriting doesn't know about your other financial goals: building an emergency fund, saving for retirement, planning for kids' education, or simply wanting slack in your budget for a bad month. A common, more conservative approach is to run this calculator, then deliberately shop 10-20% below your maximum qualification, especially if your income is variable (commission, self-employment, bonus-heavy) or if you're carrying other savings goals a lender's DTI formula doesn't account for.
It's also worth stress-testing your own number: could you still make this payment if one income in the household paused for a few months, if property taxes rose at the next reassessment, or if a rate on an adjustable product reset higher? The calculator above assumes a fixed rate and today's tax/insurance inputs held constant — it doesn't model those scenarios for you, so it's worth running the numbers again with a slightly higher tax rate or insurance cost if you want a more conservative estimate.
If your down payment is below 20% of the home price, conventional lenders typically require Private Mortgage Insurance (PMI), which protects the lender — not you — in case of default. PMI is usually billed monthly as a percentage of your loan amount, commonly falling somewhere in the 0.3%-1.5% annual range depending on your credit score, down payment size, and loan type; higher scores and larger down payments generally mean lower PMI rates. Because PMI is a real monthly cost, it factors into your back-end DTI ratio and can meaningfully lower your maximum qualifying home price compared to putting 20% down and avoiding it entirely. Under the Homeowners Protection Act, PMI on conventional loans must be automatically cancelled once your loan balance reaches 78% of the home's original value, and you can request cancellation yourself once you reach 80% — so PMI is a temporary cost tied to your equity, not a permanent one.
Take a household earning $90,000/year gross ($7,500/month) with no existing debt, a $40,000 down payment, a 6.75% rate on a 30-year loan, 1.2% property tax, and 0.5% homeowners insurance — the calculator's own default inputs. The 28% front-end rule caps housing costs at $2,100/month; the 36% back-end rule caps total debt (which, with zero other debt, is the same $2,700/month ceiling here). Because the front-end ratio is more restrictive with no other debt in the picture, it becomes the binding constraint, and the calculator works backward from that monthly PITI ceiling to a maximum loan amount and home price. Add a $500/month car payment and $300/month in student loans to the same household, and the back-end ratio becomes the binding constraint instead — the maximum qualifying home price drops, even though income and the front-end housing budget haven't changed at all. That's the mechanic worth understanding: whichever ratio is tighter for your situation is the one that actually sets your ceiling.
This tool applies standard DTI thresholds to the income and debts you enter, but it doesn't replace full underwriting. It does not check your credit score or credit history (which affects both your interest rate and whether certain loan programs are available to you), does not verify income the way a lender's documentation review does, does not account for reserves lenders may require (cash left over after closing), and does not model loan-program-specific overlays that individual lenders sometimes apply on top of the baseline conventional or FHA guidelines. It also doesn't use or estimate today's actual mortgage rates — the rate field is yours to set based on a real quote or a reasonable planning assumption, since rates move daily.