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Calculating your affordability…
How Mortgage Affordability Is Calculated
Lenders use your income, debts, and the 28/36 rule to determine how much they will lend you. Here is exactly what goes into the math.
The 28/36 Rule
This is the standard guideline used by most conventional lenders. Front-end: Your total monthly housing cost (mortgage P&I + taxes + insurance + PMI + HOA) should not exceed 28% of your gross monthly income. Back-end: All monthly debt payments (housing + car + student loans + credit cards) should not exceed 36%.
From Payment to Home Price
Once we know the maximum monthly P&I payment, we use the inverse amortization formula to find the maximum loan amount, then add your down payment to get the maximum home price.
What Loan Type Changes
FHA allows up to 43% back-end DTI (some lenders 50%). VA and USDA focus on residual income rather than strict DTI ratios. Our calculator applies the most accurate rules per loan type.
2026 Salary-to-Home-Price Reference Table
Quick estimates at today's average rate (6.82%, 30-year, 20% down, $5,000/yr taxes, $1,500/yr insurance, minimal other debt).
| Annual Income | Max Monthly Housing | Max Loan (28% rule) | Max Home Price (20% down) | Home Price (10% down) |
|---|---|---|---|---|
| $50,000 | $1,167 | $163,000 | $203,000 | $181,000 |
| $60,000 | $1,400 | $196,000 | $245,000 | $218,000 |
| $70,000 | $1,633 | $229,000 | $286,000 | $254,000 |
| $80,000 | $1,867 | $261,000 | $326,000 | $290,000 |
| $100,000 | $2,333 | $327,000 | $408,000 | $363,000 |
| $120,000 | $2,800 | $392,000 | $490,000 | $435,000 |
| $150,000 | $3,500 | $490,000 | $612,000 | $544,000 |
| $200,000 | $4,667 | $653,000 | $817,000 | $726,000 |
| $250,000 | $5,833 | $817,000 | $1,021,000 | $907,000 |
* Estimates only. Assumes no other debt, average insurance/taxes. Use the calculator above for your personalized results.
Conventional, FHA, VA & USDA — Which Is Best for Your Budget?
The loan type you choose changes your minimum down payment, PMI requirements, credit score threshold, and maximum DTI allowed.
Conventional Loans
Not government-backed. As little as 3% down with PMI. Best rates for 740+ credit and 20%+ down. 2026 conforming limit: $806,500 (most counties). Max DTI typically 36–45%.
FHA Loans
Backed by the FHA. 3.5% down with 580+ credit score, or 10% down with 500–579. MIP required for the life of the loan if down payment <10%. Max DTI up to 43–50% in some cases.
VA Loans
For eligible veterans and active-duty service members. No down payment, no PMI. No official credit minimum (most lenders require 620+). Lenders look at residual income rather than a strict DTI cap.
USDA Loans
For rural and some suburban areas. No down payment required. Income limits apply (typically 115% of area median income). Requires 640+ credit score. 1% upfront guarantee fee and 0.35% annual fee.
Mortgage Affordability — Frequently Asked Questions
Answers to the most searched questions about how much house you can afford.