How Much House Can I Afford?

How the Home Affordability Calculator Works

This calculator uses the debt-to-income (DTI) ratio method that lenders use to determine how much you can borrow. It calculates the maximum monthly payment you can afford, then works backward to find the highest home price that fits your budget.

What Is the Debt-to-Income Ratio?

Your DTI ratio is the percentage of your gross monthly income that goes toward debt payments. Lenders use this number to assess risk:

• 28% or less — Conservative. Leaves plenty of room for savings and unexpected expenses.
• 36% — Standard conventional loan threshold. Most common recommendation.
• 43% — Maximum for many conventional loans (qualified mortgage limit).
• 50% — FHA loan maximum. Higher risk, but possible with strong credit.

Tips to Afford More Home

• Pay down existing debt — every $100/month freed up adds roughly $15,000 to your buying power.
• Increase your down payment — this directly increases the home price you can afford.
• Improve your credit score — a higher score qualifies you for lower interest rates.
• Consider a longer loan term — 30-year mortgages have lower monthly payments than 15-year.
• Shop in areas with lower property taxes — this frees up more of your budget for the actual home.