Calculate how much house you can afford based on income, debts, and down payment
Before taxes and deductions
Car loans, student loans, credit cards, etc.
Typically 10-20% of home price
Average US: 1.1%, varies by state
Maximum Home Price
$261,711.63
Based on 28/36 rule
Max Loan Amount
$201,711.63
Down Payment
$60,000
Front-End Ratio
27.3%
Max: 28%
Back-End Ratio
35.3%
Max: 36%
Determining how much house you can afford is crucial before starting your home search. Lenders use debt-to-income (DTI) ratios to assess your ability to repay a mortgage. The standard is the 28/36 rule.
| Down Payment | Loan Type | PMI Required? | Notes |
|---|---|---|---|
| 20%+ | Conventional | No | Best rates, no PMI |
| 10-19% | Conventional | Yes | PMI until 20% equity |
| 3-5% | Conventional | Yes | First-time buyers |
| 3.5% | FHA | Yes (MIP) | Lower credit ok |
| 0% | VA/USDA | No | Veterans/rural areas |
Pro Tip:Just because you qualify for a certain amount doesn't mean you should borrow that much. Leave room in your budget for emergencies, savings, and lifestyle expenses.
A 20-point credit score increase can lower your interest rate by 0.25-0.5%, saving tens of thousands over the loan term.
Reducing monthly debt payments improves your back-end ratio, allowing you to qualify for a larger mortgage.
20% down eliminates PMI (saving $100-300/month), gets better rates, and increases buying power.
Adding a spouse or family member's income can significantly increase the amount you qualify for.
Compare rates from multiple lenders. A 0.5% rate difference on a $300k loan saves $30,000+ over 30 years.
Pre-approval shows sellers you're serious and gives you accurate numbers for your budget.
A general rule is 2.5-3 times your annual salary. With a $75,000 salary, you can afford roughly $187,500-$225,000. However, this depends on debts, down payment, interest rates, and local costs.
Private Mortgage Insurance (PMI) protects the lender if you default. It costs 0.5-1% of the loan amount annually. Avoid it by putting down 20% or using a piggyback loan (80-10-10). PMI can be removed once you reach 20% equity.
No. Lenders approve based on maximum ratios, but you should leave room for emergencies, savings, and lifestyle. Many financial advisors recommend keeping housing costs to 25% of gross income, not 28%.
All monthly debt obligations: mortgage, car loans, student loans, credit card minimum payments, personal loans, and child support. Utilities, groceries, and insurance (except mortgage insurance) are not included.
Closing costs typically run 2-5% of the home price ($6,000-15,000 on a $300k home). This includes appraisal, title insurance, attorney fees, and lender fees. Budget for this in addition to your down payment.
Yes, but student loans count toward your back-end ratio. If you have $500/month in student loans, that reduces your available mortgage payment. Consider income-driven repayment plans to lower monthly payments and improve qualification.