Most people start house hunting by looking at listings. Lenders start with your income and your monthly debts. This calculator works the way a lender does: it takes what you earn, what you already owe each month, and what you can put down, then works backward to the highest home price whose monthly cost fits inside a debt-to-income (DTI) limit.
Enter your income, debts, down payment and loan terms, and you get a maximum price under the traditional 28/36 rule, a moderate 31/43 scenario, a stretch scenario, and a fourth result that uses limits you choose yourself. A full monthly breakdown shows principal and interest, property tax, homeowners insurance, mortgage insurance (PMI) and HOA dues, so the number is a real monthly cost and not just a loan payment.
It is built for first-time buyers deciding on a search budget, for people comparing how a bigger down payment changes their range, and for anyone who wants to see how much a lender's higher DTI limit would stretch a budget, and what that costs each month.
Reviewed by: CalcMojo Editorial Team
How the calculator finds your maximum price
A lender looks at two ratios, both measured against gross (before-tax) monthly income:
- Front-end ratio: your total monthly housing cost divided by gross monthly income.
- Back-end ratio: your housing cost plus all other monthly debt payments, divided by gross monthly income. This is the DTI figure most lenders quote.
The calculator turns each limit into a dollar budget for housing. With $100,000 of income, gross monthly income is $8,333. A 28% housing limit allows $2,333 a month. A 36% total-debt limit allows $3,000 in total debts, and if you already pay $500 a month toward a car loan, that leaves $2,500 for housing. Whichever budget is smaller wins, and the tool tells you which one is limiting you.
Next it solves for the price. Monthly housing cost has four parts that all depend on the price:
Housing cost = P&I + property tax + insurance + PMI + HOA
- P&I uses the standard amortization formula, the same one in our mortgage calculator: M = L x r(1+r)^n / ((1+r)^n - 1), where L is the loan, r the monthly rate and n the number of payments.
- Property tax is the price times your annual tax rate, divided by 12.
- Insurance is your annual premium divided by 12.
- PMI is the loan times your PMI rate, divided by 12, and only applies when the down payment is under 20% of the price.
- HOA dues are a flat monthly amount.
Because the loan is the price minus your down payment, the whole thing can be solved directly. There is no guessing and no rounding drift. The result is rounded down to the dollar so the payment never exceeds your limit.
The 28/36 rule and other DTI limits
The 28/36 rule is a rule of thumb: spend no more than 28% of gross monthly income on housing and no more than 36% on all debts together. It is a conservative planning guide rather than an official lending limit, and it is the baseline this calculator labels "Conservative."
Actual lender limits vary by loan program, and they are higher than 36%:
- The Consumer Financial Protection Bureau explains that DTI is total monthly debt payments divided by gross monthly income, and that different loan products and lenders have different DTI limits. For many years 43% was the headline number for a "qualified mortgage." A CFPB rule finalized in December 2020 replaced that fixed 43% cap in the general qualified-mortgage definition with a price-based test, so 43% is now a common benchmark rather than a federal ceiling.
- Fannie Mae's Selling Guide sets the maximum total DTI at 36% for manually underwritten loans, rising to 45% when the borrower meets credit score and reserve requirements. Loans run through its automated underwriting system (Desktop Underwriter) can go up to 50%.
- FHA loans have their own benchmark ratios, commonly cited as 31% for housing and 43% for total debt in manual underwriting, with higher ratios possible when other strengths offset the risk. We could not retrieve the HUD handbook text directly, so treat the FHA figures as a typical benchmark and confirm them with an FHA lender.
That is why the "Moderate" scenario uses 31/43 and the "Stretch" scenario drops the housing-only limit and uses a 50% total-debt ceiling, the top of Fannie Mae's automated range. Those scenario names are ours. A lender approving you for the stretch amount is not telling you it is a comfortable payment.
Worked example with the default numbers
The tool opens with $100,000 income, $500 in monthly debts, a $60,000 down payment, a 6.5% rate, a 30-year term, 1.0% property tax, $1,800 a year of insurance, no HOA and a 0.7% PMI rate:
| Scenario | Max price | Loan | Monthly cost |
|---|---|---|---|
| Conservative (28/36) | $335,718 | $275,718 | $2,333 |
| Moderate (31/43) | $368,029 | $308,029 | $2,583 |
| Stretch (50% total debt) | $508,043 | $448,043 | $3,667 |
| Your limits (36/43) | $421,881 | $361,881 | $3,000 |
For the conservative case, the $2,333 breaks down as $1,743 principal and interest, $280 property tax, $150 insurance and $161 PMI. The down payment is 17.9% of the price, under 20%, so PMI is included. The housing limit is the one that binds.
Look at how fast the range opens up: moving from 28/36 to 31/43 adds about $32,000 of price, and the stretch scenario adds more than $170,000. The stretch buyer carries a monthly cost $1,333 higher than the conservative buyer, and the total-debt ratio is 50%, which leaves little room for savings, repairs or a drop in income.
Why the 20% down payment line matters
When the down payment is under 20% of the price on a conventional loan, lenders usually require private mortgage insurance. The calculator adds PMI automatically below that line. This creates a quirk: a price just above the 20% line costs noticeably more per month than a price just below it, so the highest affordable price can sit exactly at the point where your down payment equals 20%. When that happens the tool reports that price, because going any higher triggers PMI and pushes the payment over your limit.
If you are close to 20%, a few thousand dollars more down can raise the amount you can afford. PMI rates depend on credit score, down payment and loan type, so replace the 0.7% default with an actual quote.
What the calculator does not include
Your income and debts tell a lender whether you can pay; they do not cover everything you will spend on a home. Budget separately for:
- Closing costs and moving costs, paid in cash on top of the down payment.
- Maintenance and repairs. A common planning habit is to set aside a percentage of the home's value each year.
- Utilities, which are often higher in a larger house.
- Property tax reassessment after a purchase, which can raise the bill above the previous owner's.
- An emergency fund that survives a job loss. Our emergency fund calculator can size it.
Credit score and cash reserves also affect approval and your interest rate, and the calculator uses the rate you type. Get written rate quotes from several lenders before you rely on any of these figures.
How to use the results
Treat the conservative number as a comfortable target, the moderate number as a realistic upper range, and the stretch number as a ceiling to understand rather than aim for. Change one input at a time. Pay down a car loan and watch the back-end budget grow. Raise the down payment and watch PMI disappear. Lower the rate by half a point and see the price rise.
You can then check your own ratio with the debt-to-income calculator, model the exact payment with the mortgage calculator, or see how extra payments shorten the loan with the amortization calculator.
Frequently asked questions
How much house can I afford on a $100,000 salary?
With the default inputs ($500 in monthly debts, $60,000 down, 6.5% rate, 1.0% property tax, $1,800 a year of insurance) the 28/36 rule gives about $335,700, the 31/43 scenario about $368,000, and the 50% total-debt stretch scenario about $508,000. Your own result depends mostly on your debts, down payment and rate, so change the inputs to match yours.
What is the 28/36 rule?
It is a rule of thumb that housing should take no more than 28% of gross monthly income and all debts together no more than 36%. It is a conservative guide, not a legal limit. Many lenders will approve higher ratios.
What DTI do lenders allow?
It varies by program. Fannie Mae's Selling Guide allows up to 36% for manually underwritten loans, up to 45% with stronger credit and reserves, and up to 50% for loans approved through its automated system. FHA and other programs have their own benchmarks. The CFPB notes that DTI limits differ between loan products and lenders.
Does the calculator include PMI?
Yes, when the down payment is under 20% of the home price. It uses the PMI rate you enter, applied to the loan amount each year and divided into monthly payments.
Why does my maximum price stop at exactly five times my down payment?
That is the 20% line. Just above it PMI starts, and the added cost would push you over your limit. The calculator shows the highest price that avoids PMI.
Are debts like rent or utilities counted?
No. Enter recurring debt payments such as car loans, student loans, personal loans and minimum credit card payments. Rent goes away when you buy and utilities are not part of the DTI calculation.
Is the maximum price what I should spend?
Not necessarily. A lender's maximum describes what you can qualify for, not what leaves room for savings, repairs and the unexpected. The conservative result is the more comfortable target.
Sources & Methodology
- CFPB: What is a debt-to-income ratio? — definition of DTI as monthly debt payments over gross monthly income; limits differ by product and lender.
- CFPB: General QM final rule (December 2020) — replaced the fixed 43% DTI cap in the general qualified-mortgage definition with a price-based test.
- Fannie Mae Selling Guide B3-6-02: Debt-to-Income Ratios — 36% maximum total DTI for manually underwritten loans, up to 45% with eligibility matrix requirements, and 50% for Desktop Underwriter loans.
- HUD Handbook 4000.1 (FHA Single Family Housing Policy) — governs FHA qualifying ratios. We could not retrieve its text; the 31/43 FHA benchmark is as commonly reported by lenders and is not independently confirmed here.
- The 28/36 rule is a traditional rule of thumb with no single official source. Default rate, tax, insurance and PMI values are illustrative and editable.
- Payment formula: standard fixed-rate amortization, identical to the one used in our mortgage calculator.
This calculator provides estimates for educational purposes only. It is not financial advice, a loan offer or a pre-approval. Defaults for interest rate, property tax, insurance and PMI are illustrative. Lender requirements differ and change. Consult a licensed mortgage professional before making a home purchase decision.
Data accurate as of: November 2026