🏡 Home Affordability Calculator
Discover how much house you can realistically afford using the same debt-to-income (DTI) method mortgage lenders use — before you start shopping.
Your Financial Situation
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Affordable Home Price
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Max Monthly Payment (PITI)
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Your Monthly Payment
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Loan Amount
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Down Payment %
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Front-End DTI
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Back-End DTI
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The 28/36 Rule of Home Affordability
Lenders use two key ratios to determine mortgage eligibility:
Front-end DTI (28% rule): Monthly housing costs ÷ Gross monthly income ≤ 28%
Back-end DTI (36% rule): All monthly debts ÷ Gross monthly income ≤ 36%
Many lenders today allow up to 43% back-end DTI (some up to 50% for strong applicants)
Back-end DTI (36% rule): All monthly debts ÷ Gross monthly income ≤ 36%
Many lenders today allow up to 43% back-end DTI (some up to 50% for strong applicants)
What's Included in Monthly Housing Costs (PITI)
- Principal — the portion of your payment reducing the loan balance
- Interest — the cost of borrowing money
- Taxes — property taxes, usually 1/12 of your annual tax bill
- Insurance — homeowner's insurance + PMI if down payment < 20%
Costs to Budget Beyond Your Mortgage
| Expense | Typical Amount |
|---|---|
| Closing costs | 2–5% of loan amount |
| Home inspection | $300–$500 |
| Moving costs | $1,000–$5,000 |
| Maintenance/repairs | 1–2% of home value/year |
| Emergency fund | 3–6 months expenses |
How much should my down payment be? +
The traditional advice is 20% to avoid PMI (private mortgage insurance). However, many loan programs accept less: FHA loans require 3.5% minimum (with a credit score of 580+), conventional loans accept 3–5%, and VA/USDA loans offer 0% down for eligible borrowers. A smaller down payment means you buy sooner but pay more over time due to PMI and higher interest.
What credit score do I need to buy a home? +
Minimum credit scores: FHA loan = 500 (with 10% down) or 580 (with 3.5% down); Conventional loan = typically 620+; Best rates require 740+. Even improving your score by 40 points (e.g., from 680 to 720) can save you thousands in interest over the life of a 30-year mortgage.
Is it better to buy or rent? +
It depends on your price-to-rent ratio, how long you plan to stay, and your local market. A general guideline: if the annual rent for a property is more than 5% of its purchase price, renting may be more economical. Also consider that buying builds equity but ties up capital and comes with maintenance costs of 1–2% of home value per year.