House Affordability Calculator

Mortgage lenders in the U.S. use two debt-to-income (DTI) ratios to decide how much they will lend: the front-end ratio and the back-end ratio. Both compare your monthly debt obligations to your gross monthly income. The lower your DTI, the better the loan terms you are likely to qualify for. This calculator uses both ratios, along with your down payment, property tax, and insurance, to estimate the highest home price you can finance under each loan type's guidelines. For more on DTI ratios specifically, see our Debt-to-Income Ratio Calculator.

Front-end ratio

The front-end ratio (also called the housing ratio or mortgage-to-income ratio) divides total monthly housing costs by gross monthly income:

Front-end ratio = monthly housing costs ÷ gross monthly income × 100%

Monthly housing costs include the principal and interest payment, property taxes, homeowners insurance, and HOA fees. Conventional and FHA loans use the front-end ratio as one qualifying threshold; VA loans focus on the back-end ratio instead.

Back-end ratio

The back-end ratio adds all other recurring monthly debts (car loans, student loans, credit card minimums) to housing costs, then divides by gross monthly income:

Back-end ratio = (housing costs + all other monthly debts) ÷ gross monthly income × 100%

This is the primary DTI figure most lenders rely on. It gives a broader picture of total debt load, housing included. All loan types in this calculator use the back-end ratio as their main qualifying measure.

Conventional loans and the 28/36 rule

A conventional loan is a mortgage not directly insured by the federal government. Most follow guidelines set by Fannie Mae or Freddie Mac, the government-sponsored enterprises that buy and securitize mortgages. Loans that meet their standards are called conforming loans; those that don't are non-conforming.

The 28/36 rule sets the qualifying thresholds for conforming conventional loans: no more than 28% of gross monthly income on housing costs (front-end), and no more than 36% on all debt combined (back-end). A household earning $8,000 per month gross should spend no more than $2,240 on housing and carry no more than $2,880 in total monthly debt payments.

In competitive lending markets, lenders sometimes approve borrowers who exceed these limits when the borrower has significant savings or a high credit score. The 28/36 rule is a guideline, not a hard cap, but it remains the most widely cited standard for conventional loan qualification. For a detailed look at how this plays out with conforming loan limits, Nobel laureate Robert Shiller's book Irrational Exuberance documents how loosely the rule can be enforced during lending booms.

FHA loans

FHA loans are insured by the Federal Housing Administration, which allows lenders to offer them at lower down payments and to borrowers with lower credit scores than a conventional loan typically requires. The qualifying DTI limits are 31% front-end and 43% back-end, higher than the 28/36 rule. FHA loans also require an upfront mortgage insurance premium of 1.75% of the loan amount, plus annual premiums. The insurance is what allows lenders to take on riskier applicants. For FHA-specific payment estimates, see our FHA Loan Calculator.

VA loans

VA loans are available to eligible veterans, active-duty service members, National Guard members, reservists, and surviving spouses, and are guaranteed by the U.S. Department of Veterans Affairs. The back-end DTI limit is 41%, and VA loans have no front-end ratio threshold. Private mortgage insurance is not required, but most VA loans carry a funding fee that varies by service history and down payment size. For payment estimates specific to VA financing, see our VA Mortgage Calculator.

Custom DTI ratios

This calculator lets you set a custom DTI anywhere from 10% to 50% in increments of 5%. Down payments below 20% automatically include a 0.5% PMI estimate, since conventional loans with less than 20% down typically require private mortgage insurance. DTIs above 50% are not available because most lenders treat that as the outer limit of approvable risk regardless of compensating factors.

Conservative buyers often target 20% to 25% to leave room for unexpected costs. A household at 45% DTI has less cushion if income drops or expenses rise than one at 28%, so the right number depends on your financial stability and how much uncertainty you can absorb.

When the home you want is out of reach

If the calculator returns a price lower than your target, several factors can shift the result over time.

Paying down existing debt lowers your back-end DTI directly. A car payment of $400 per month that you eliminate can raise your affordable home price by several thousand dollars under any loan type.

A higher credit score lets you qualify for a lower interest rate. A rate drop of 0.5 percentage points on a $300,000 loan cuts the monthly payment by about $90, which increases the price you can afford at the same DTI threshold.

A larger down payment reduces the loan amount, lowers the monthly payment, and eliminates PMI once you cross 20%, which frees more budget for principal and interest. Increasing income has the most immediate effect on both DTI ratios. Even a modest raise compresses your ratios significantly when your debt load stays flat.

If the gap between your current affordability and your target price is large, renting while building savings and paying down debt is a practical path. State and local housing assistance programs exist for lower-income buyers. For a side-by-side financial comparison, see our Rent vs. Buy Calculator.

What a point of interest rate costs you

Affordability is set by the payment, so the rate decides how much house that payment buys. Hold the payment at $1,896 a month on a 30-year loan and the amount it supports is $333,962 at 5.5%, $299,999 at 6.5%, and $271,190 at 7.5%. Each percentage point moves borrowing power by roughly a tenth.

That is why a rate move can matter more than a raise. It also cuts the other way: a buyer who is priced out today gets that purchasing power back if rates fall, without saving another dollar.

Loan limits, and the price where financing changes

Above a certain loan size the mortgage stops being a conforming loan, and the terms change. For 2026 the FHFA baseline limit is $832,750 for a one-unit property, rising to $1,249,125 in high-cost counties and in Alaska and Hawaii. Above that a loan is a jumbo, and jumbo underwriting usually asks for a larger deposit, more reserves and a stronger credit profile.

The FHA line sits lower. Its 2026 floor is $541,287 and its ceiling is $1,249,125, applying to case numbers assigned from 1 January 2026. A buyer relying on a 3.5% down payment is therefore capped by the county FHA limit rather than by their own budget in expensive markets, which is worth checking before house hunting rather than after an offer.

The costs that vary more than the loan does

Two buyers with identical incomes and identical loans can afford very different prices, because property tax and insurance are local. Effective property tax rates run from a few tenths of a percent to over 2% of value depending on the state and county, and homeowners insurance varies just as widely with wind, wildfire and hail exposure. On a $400,000 home the difference between a 0.5% and a 2% tax rate is $500 a month, which at typical rates is around $80,000 of borrowing power.

Lenders also want reserves after closing, usually measured in months of the full housing payment. Spending every dollar of savings on the deposit can fail an application that a smaller deposit would have passed, so plan the cash in three parts: deposit, closing costs, and what remains in the account afterwards.