A walkthrough, end to end.
- 1
Enter your annual gross income, monthly debt payments, available down payment, mortgage rate, and term.
- 2
The calculator applies the standard 28/36 lender ratios to find the maximum mortgage payment, then back-solves for the home price.
- 3
See conservative, standard, and stretched price ranges based on different DTI thresholds.
DTI affordability rule
Lenders typically allow up to 28% of gross monthly income for housing (PITI) and 36% (or 43% stretched) for total debt service. The calculator works backwards: target payment = income × 0.28; home price = whatever produces that payment after subtracting down payment.
What you can do with this.
First-time homebuyer affordability
First-time buyers should be conservative — emergency fund, maintenance reserves, and adjusting to homeownership costs all matter. Use the 28% (front-end) ratio rather than 43% to leave room for surprises.
Affordability with student loans
Student loan payments count in the 36% back-end ratio. Higher loan balances reduce maximum mortgage. The calculator's debt input handles this automatically.
Affordability by income level
$100K/yr income → ~$2,300/mo housing comfortable, $400K home with 20% down at 7%. Doubles roughly linearly with income, modulo down payment scale.
Down payment leverage
Each $10K increase in down payment raises affordable home price by ~$15–18K (savings on PMI + lower loan amount). Below 20% down adds PMI cost which lowers affordability.
Effect of mortgage rate
Going from 7% to 6% rate increases affordable home price by ~10–12% at the same payment. Major leverage on what you can buy when rates fall.
Conservative vs. stretched
28% DTI = conservative (recommended). 36% = standard lender max. 43% = stretched (qualified mortgage cap). Most financial advisors recommend staying near 28% for resilience.
Property tax impact
High-tax states (NJ, IL, TX) eat 1.5–2.4% of home value annually — significantly reducing affordable price for the same income. Low-tax states (HI, AL) benefit by 1%+ in affordability.
Affordability calculator 2026 — what's current
With rates at ~7% and median home prices high, the typical median-income US household can afford ~$280K — far below the median home price ~$420K. Affordability gap is the central housing-market story of 2026.
Frequently asked.
Housing costs (PITI) ≤ 28% of gross monthly income; total debt payments ≤ 36%. The standard lender underwriting baseline. Conservative; stretched DTI up to 43% is sometimes allowed.
Generally no. Lenders qualify you on the math; you should consider future job changes, kids, unplanned costs, and whether you want money for other goals. Most advisors recommend 80% of qualified max.
FHA allows 31/43 ratios with 3.5% down; VA has more flexibility for veterans. The calculator's 28/36 conservative defaults work as a baseline; specialized loans permit somewhat higher.
No. Calculations run entirely in your browser.