How to use this calculator
- Annual household income: gross pay before taxes for everyone on the loan.
- Monthly debt payments: minimum payments on car loans, student loans, credit cards, personal loans and child support. Leave out rent, utilities and groceries.
- Down payment: the cash you’ll put toward the price.
- Interest rate and loan term: a current quote if you have one.
- Debt-to-income guideline: choose how strict to be (more below).
- Taxes, insurance and fees: your local property tax rate, a homeowners insurance estimate, any HOA dues, and a PMI rate that applies only if you put down less than 20%.
The result is the highest price whose full monthly payment fits your chosen limits. The note under it tells you which limit is binding: your housing payment on its own, or your total debts.
How the calculation works
Lenders look at two debt-to-income (DTI) ratios, both using gross monthly income:
The housing payment is principal and interest plus property tax, insurance, PMI and HOA dues. Each guideline gives a maximum for one or both ratios, so your housing budget is the smaller of:
- the housing limit × monthly income, and
- the total limit × monthly income − your other debts.
The calculator then searches for the highest price whose payment fits that budget. Because property tax and PMI grow with the price, it can’t simply invert the mortgage formula. Sometimes the answer lands exactly at 20% down, because one dollar more would add PMI and break the budget.
Worked example
You earn $100,000 a year ($8,333 a month), pay $500 a month on other debts, have $60,000 for a down payment, and can get 6.5% on a 30-year loan. Property tax is 1.1% and insurance $1,800 a year.
- 28% housing limit: $8,333 × 0.28 = $2,333
- 36% total limit: $8,333 × 0.36 − $500 = $2,500
The housing limit is lower, so it binds. The highest price that fits $2,333 a month is $338,068: a $278,068 loan with $1,757.58 principal and interest, $309.90 property tax, $150 insurance and $115.86 PMI (you’re putting down 17.7%).
If your other debts were $1,000 a month instead, the total limit would bind at $2,000, and your maximum would fall to $300,000, exactly 20% down. At $1,500 a month in debts, it drops to about $238,900. Paying off a car loan can be worth tens of thousands in buying power.
The guidelines in this calculator
| Option | Housing limit | Total limit | Where it comes from |
|---|---|---|---|
| Conservative | 28% | 36% | The classic 28/36 budgeting rule |
| FHA standard | 31% | 43% | HUD’s standard ratios for manually underwritten FHA loans |
| Conventional | none | 45% | Fannie Mae’s maximum for manually underwritten loans that meet credit score and reserve requirements |
| Aggressive | none | 50% | Fannie Mae’s maximum for loans approved through Desktop Underwriter |
A few details matter. Fannie Mae’s basic manual-underwriting limit is 36%; the 45% ceiling needs a qualifying credit score and cash reserves. FHA allows manual-underwriting ratios up to 37/47 with one compensating factor and 40/50 with two (such as cash reserves or a minimal payment increase), for borrowers with credit scores of 580 or higher. Loans approved through automated underwriting systems are judged on the whole file and can be held to different limits. VA loans use 41% as a benchmark rather than a hard cap and also look at residual income, the cash left each month after major expenses. Since October 2022, the federal qualified-mortgage rules no longer set a fixed 43% DTI cap, though lenders must still consider your DTI or residual income.
For the same $100,000 buyer, the four options give a maximum price of $338,068 (28/36), $370,730 (FHA standard), $457,830 (45%) and $512,268 (50%). The higher limits are what you might be approved for, not what’s comfortable.
How interest rates change your budget
Same buyer, same $2,333 budget under the 28/36 rule:
| Rate | Maximum price | Loan amount |
|---|---|---|
| 5.5% | $363,561 | $303,561 |
| 6.0% | $350,405 | $290,405 |
| 6.5% | $338,068 | $278,068 |
| 7.0% | $326,496 | $266,496 |
| 7.5% | $315,641 | $255,641 |
Each half-point move in rates shifts the maximum price by roughly $11,000 to $13,000 here.
How much house by income
$500 of monthly debts, $60,000 down, 6.5% for 30 years:
| Annual income | 28/36 rule | FHA standard (31/43) |
|---|---|---|
| $60,000 | $211,299 | $245,842 |
| $80,000 | $289,596 | $303,228 |
| $100,000 | $338,068 | $370,730 |
| $125,000 | $414,280 | $455,109 |
| $150,000 | $490,493 | $539,487 |
At $60,000, the 36% total limit binds under the 28/36 rule because $500 of debts is a bigger share of a smaller income.
Tips before you shop
- Budget from take-home pay. Lenders use gross income, but you’ll pay the mortgage from your paycheck after taxes and retirement contributions. The paycheck calculator shows what that is.
- Keep cash for closing. You’ll need closing costs on top of the down payment. Estimate them with the closing cost calculator.
- Know your ratios. The debt-to-income ratio calculator shows exactly where you stand against each loan program.
- Check the full payment. Once you have a target price, the mortgage calculator gives the payment with every cost and an amortization schedule.
- Still unsure about buying? The rent vs. buy calculator compares the long-run cost of both.
Assumptions and limitations
The calculator assumes a fixed rate, property tax as a percentage of the price, a flat insurance premium and PMI charged as an annual percentage of the loan when you put down less than 20%. FHA loans charge their own mortgage insurance premiums instead of PMI, and VA loans have none, so adjust the PMI rate to match your quote. Lenders also look at credit score, cash reserves, employment history and the property itself; meeting a ratio doesn’t guarantee approval.
Sources
- Fannie Mae Selling Guide: B3-6-02, Debt-to-Income Ratios
- U.S. Department of Housing and Urban Development: Mortgagee Letter 2014-02, Manual Underwriting, now part of HUD Handbook 4000.1
- Code of Federal Regulations: 38 CFR 36.4340, VA underwriting standards
- Consumer Financial Protection Bureau: General QM final rule, delay of mandatory compliance date
- Consumer Financial Protection Bureau: Figure out how much you want to spend
This calculator gives estimates for planning only. A lender’s pre-approval is the only reliable measure of what you can borrow.
Frequently asked questions
How much house can I afford on a $100,000 salary?
Using the conservative 28/36 rule with $500 of monthly debts, $60,000 down and a 6.5% 30-year rate, about $338,000. That keeps the full housing payment, including tax, insurance and PMI, at about $2,333 a month. Under FHA's standard 31/43 ratios the same buyer reaches about $371,000.
What is the 28/36 rule?
It's a budgeting guideline that keeps your housing payment at or below 28% of gross monthly income and all debt payments, housing included, at or below 36%. It's more conservative than most loan programs allow, which is the point. It leaves room for saving, retirement and surprises.
Do lenders really allow a 45% or 50% debt-to-income ratio?
Some do. Fannie Mae allows up to 50% for loans approved through its Desktop Underwriter system and up to 45% for manually underwritten loans that meet credit score and reserve requirements. Being approved at that level doesn't mean the payment will feel comfortable, so test your own budget too.
Why does my down payment matter so much?
A bigger down payment means a smaller loan for the same price, and once you reach 20% down you also avoid private mortgage insurance on a conventional loan. Going from $60,000 to $80,000 down in our example raises the maximum price from about $338,000 to $372,000 at the same monthly budget.
Should I use gross or take-home pay?
Lenders use gross income (before taxes), so this calculator does too. But your budget is paid from take-home pay. If the payment shown would leave too little after taxes, retirement saving and everyday costs, aim lower than the maximum.
Does this include closing costs?
No. This calculator finds the price your monthly income supports. You'll also need cash for closing costs, which the CFPB says typically run 2% to 5% of the purchase price, plus some savings left over. Our closing cost calculator estimates them.
Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.