How Much Home Can You Afford?

The 28/36 rule is a guideline used by most lenders. It states that no more than 28% of your gross monthly income should go toward total housing costs (mortgage, taxes, insurance, HOA) and no more than 36% should go toward all monthly debt payments combined. Some loan programs, like FHA, allow higher ratios.

At a 6.75% interest rate with 10% down, you would need approximately $75,000-$85,000 in annual gross income, depending on your existing debts, local property tax rates, and insurance costs. Use the calculator above with your specific numbers for an accurate estimate.

Yes. A larger down payment reduces the loan amount, which lowers your monthly principal and interest payment. This frees up room in your DTI ratio, allowing you to qualify for a higher purchase price. It also eliminates PMI at 20% down.

Back-end DTI includes recurring minimum debt payments: car loans, student loans, credit card minimums, personal loans, child support, and alimony. It does not include utilities, groceries, subscriptions, cell phone bills, or other non-debt expenses.

No. This calculator provides an estimate based on general industry guidelines. A pre-approval from a lender involves a credit check, income verification, and asset documentation, and gives you a firm commitment on your borrowing limit. We recommend getting pre-approved before you start house hunting.