Find your maximum home purchase price based on income, monthly debts, and down payment. Uses lender-standard 28%/36% DTI rules used across the United States.
28%/36% DTI rules — how much home can you afford?
The house affordability calculator uses the same guidelines US mortgage lenders apply when reviewing loan applications. The 28% front-end rule says your total monthly housing cost — principal, interest, property taxes, and insurance — should not exceed 28% of your gross monthly income. On a $75,000 annual salary ($6,250/month), that's $1,750 for housing. The 36% back-end rule says all monthly debt payments combined — housing plus car loans, student debt, credit cards — should stay under 36% of gross income. These aren't hard ceilings for every lender, but they're the conventional guidelines that Fannie Mae and Freddie Mac use to define "qualified" borrowers.
Down payment size has an outsized effect on how much home you can afford — and what you pay every month. A 20% down payment eliminates PMI, which can run $100–$250 per month on a $300,000 home, and reduces the loan balance enough to noticeably lower the payment. Putting down 10% instead saves cash upfront but adds PMI and a higher monthly payment that reduces your qualifying price. First-time buyers in many states can access down payment assistance programs through state housing agencies — California, Texas, Florida, and New York all have active programs worth researching before you shop.
Monthly PITI (principal, interest, taxes, insurance) should stay under 28% of gross monthly income. At $80,000/year, that's roughly $1,867/month for housing — including taxes and insurance, not just the loan payment.
All monthly debts combined shouldn't exceed 36% of gross income. With a $500 car payment and $200 in student loans, a $6,000/month earner has only $1,460 remaining for housing under the 36% ceiling.
Every extra $10,000 in down payment reduces the loan by $10,000 and saves roughly $65/month on a 30-year loan at 6.5%. Getting to 20% down also eliminates PMI, adding $100–$250/month back to your budget.
Budget for maintenance (1%–2% of home value annually), HOA fees if applicable, utilities, and home insurance. A $400,000 home can easily cost $4,000–$8,000/year in maintenance alone — factor this into your affordability math.