How Much Can I Afford?
"How much house can I buy?" is actually two questions: how much will a lender approve you for, and how much should you actually spend? This calculator answers both — and explains the difference.
In short: lenders compare your total monthly debts plus the new housing payment to your gross income (your debt-to-income ratio). What you can comfortably afford is often less than the maximum you'll be approved for — this tool shows both.
You Could Afford Up To
$525,000
How We Got This Number
What That Gets You
What Lenders Actually Look At
Your home budget isn't just about your income. Lenders look at the full picture, and understanding their formula helps you know where you stand before you apply.
Debt-to-income ratio (DTI) — the number that matters most
DTI is the percentage of your gross monthly income that goes to debt payments. Lenders use two versions: the "front-end" ratio (just housing costs) and the "back-end" ratio (all debts including housing). This calculator uses back-end DTI because that's what determines your maximum. Most conventional loans cap at 43-45%, FHA allows up to 50% with compensating factors, and VA loans are more flexible. But just because a lender will approve you at 50% doesn't mean you should stretch that far. Click the DTI buttons above to see the difference between conservative, standard, and aggressive — the home price changes dramatically.
"Approved for" vs "comfortable at" — they're not the same
A lender might approve you for a $525,000 home, but that doesn't mean life at that payment will be comfortable. Your DTI doesn't account for groceries, daycare, car maintenance, saving for retirement, or having an emergency fund. A common rule of thumb: keep your total housing payment under 28% of gross income (the "front-end" ratio) for comfortable living. If you have significant other expenses, aim even lower. The calculator shows what you can qualify for — a conversation with us will help you figure out what actually fits your life.
What counts as "debt" in your DTI?
Lenders include: car loans, student loans, personal loans, credit card minimum payments, child support or alimony, and any other installment or revolving debt showing on your credit report. They don't count: utilities, groceries, car insurance, health insurance, phone bills, streaming subscriptions, or most recurring expenses. One important note: even if you pay your credit card in full each month, lenders use the minimum payment from your credit report. If your reported minimum is $150/month, that's $150 counted against your DTI.
Down payment changes everything
A bigger down payment doesn't just reduce your loan amount — it eliminates PMI (at 20%+), often gets you a better rate, and increases your equity from day one. But here's what most people don't realize: you don't need 20% down to buy a home. FHA loans go as low as 3.5%, conventional loans start at 3%, and VA loans offer 0% down for eligible veterans. The trade-off is PMI and a slightly higher payment, but for many people, getting into a home sooner beats waiting years to save 20%. Try moving the down payment slider to see how it changes your buying power.
Don't forget closing costs
This calculator shows how much home you can qualify for, but you'll also need cash for closing costs — typically 2% to 5% of the loan amount. On a $400,000 loan, that's $8,000 to $20,000. Some of this can be negotiated with the seller or rolled into certain loan programs, but it's important to plan for it. When we work with you, we'll map out the full cash-to-close picture so there are no surprises.
Frequently asked questions
How much house can I afford based on my income?
Lenders compare your total monthly debt payments, including the new housing payment, to your gross monthly income. This is your debt-to-income (DTI) ratio. Many programs look for a back-end DTI in roughly the 43% to 50% range depending on the loan type and your overall profile. What you can comfortably afford is often lower than the maximum a lender will approve.
What debt-to-income ratio do lenders use?
Most conventional loans target a back-end DTI around 43% to 45%, FHA can allow higher with compensating factors, and VA tends to be more flexible. This calculator lets you compare conservative, standard, and aggressive DTI settings so you can see how the maximum home price changes.
Does this calculator include taxes and insurance?
It estimates a total housing payment and reserves part of it for taxes, insurance, and similar costs, which matter a lot in many areas. It is an estimate only. Your actual taxes, homeowners insurance, and any HOA dues depend on the specific property and will be confirmed when you get real numbers.
Is the amount I can afford the same as what I'll be approved for?
Not necessarily. A lender's maximum is based on ratios, not your full life. Groceries, childcare, retirement savings, and an emergency fund are not in the formula. Use the calculator for a starting range, then talk through what actually fits your budget.
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This calculator is for educational and estimation purposes only. It does not constitute a loan offer, pre-approval, or commitment to lend.