What Can I afford

It works backward from your income: it finds the largest monthly housing payment your debt-to-income limit allows, then converts that payment into the home price and loan amount it can support at your rate and term.

The math runs in three steps:

• Find your housing budget. It multiplies your gross monthly income by the back-end DTI cap (for example 45%), then subtracts your other monthly debts. What is left is the most you can spend on the house each month.
• Subtract the non-loan costs. Property taxes, homeowners insurance, mortgage insurance (PMI), and any HOA dues come out of that budget first, leaving the amount available for principal & interest.
• Solve for the price. It turns that principal-and-interest amount into a loan size at your rate and term, then adds your down payment to get the home price.

In automatic mode the calculator is a little smarter: because taxes, insurance, and PMI all scale with the home price, it solves the budget and the price together in a short loop until they agree — so the payment you see already includes the escrow costs that price creates. The result is a realistic price, not a back-of-the-napkin guess.

Gross monthly income is your total income before taxes and deductions — and lenders count every stable, documentable source you can prove will continue.

Use your income before anything is taken out, not your take-home pay. If you are paid hourly or annually, divide the yearly figure by 12. Common qualifying income includes:

The theme is stable and provable: a lender wants a two-year track record and a reasonable expectation the income continues for at least three more years. If you have a co-borrower, combine both incomes in this field.

DTI — debt-to-income ratio — is the share of your gross monthly income that goes to debt payments, and it is the single biggest factor in how much you can borrow.

There are two DTI ratios, and lenders look at both:

• Front-end (housing) ratio — just your total housing payment (PITI + HOA) divided by income.
• Back-end (total) ratio — your housing payment plus all other monthly debts, divided by income. This is the one that usually sets your limit.

This calculator caps your housing payment at the back-end limit and, if you turn it on, the front-end limit too — then uses whichever is tighter. Typical maximums by program:

These are guideline ceilings, not promises. Strong credit, cash reserves, or a big down payment can push a lender to the high end; weak compensating factors pull it down. VA is the outlier — instead of a hard ratio it checks residual income (the cash left each month after all bills), which is why veterans often qualify for more than the percentage alone suggests.

Include the recurring monthly debt payments that show on your credit report; leave out everyday living expenses that don’t.

Enter these in the “other monthly debts” field — they count against your back-end DTI:

A few nuances a lender applies: only the minimum credit-card payment counts, not your full balance; debts with fewer than ~10 payments left can sometimes be excluded; and your future housing payment is handled separately by this calculator — don’t put your current rent here.

Yes — it builds the full PITI payment plus HOA, not just principal and interest, so the affordability number reflects your real monthly cost.

PITI is the four parts of a mortgage payment:

On top of PITI the calculator adds HOA dues (if any) and PMI — private mortgage insurance, which conventional loans require when you put down less than 20% (a loan-to-value above 80%). In automatic mode it estimates taxes and insurance as a percentage of the price and adds PMI automatically once your down payment falls under 20%; in manual mode you type in exact monthly figures from a quote.

A lower rate or a longer term shrinks your monthly payment, so the same income supports a bigger loan — rate especially has a powerful effect on buying power.

Because the calculator works backward from a fixed monthly budget, anything that lowers the payment per dollar borrowed lets that budget stretch further. A rough illustration of how a $2,000/month principal-and-interest budget translates into loan size:

Two takeaways: every roughly 1% the rate climbs costs you around 10% of buying power, and a 30-year term supports a noticeably larger loan than a 15-year because the payments are spread over twice as long. The trade-off is that the longer term costs far more interest over the life of the loan — cheaper each month, pricier overall. If today’s rate is squeezing your budget, a temporary buydown can lower the early-year payment.

No — this is an estimate based on the numbers you type in; a pre-approval is a lender’s documented commitment after verifying your finances.

The difference matters when you make an offer:

Think of the calculator as the first step — it tells you the ballpark so you know whether to shop at $350k or $550k. The pre-approval is what you actually shop and bid with, because it reflects your real credit score, the specific loan program, and an underwriter’s review. When you’re ready, we can pre-approve you quickly.

Increase your income or down payment, pay down monthly debts, or lower your rate — each one frees up budget that this calculator turns into a higher price.

The biggest levers, roughly in order of impact:

• Pay down monthly debt. Every $100/month of debt you clear is $100 added straight to your housing budget — often the fastest win. A $300 car payment paid off can add tens of thousands to your price.
• Raise your down payment. More down means a smaller loan, and crossing 20% also removes PMI — freeing budget twice.
• Lower your rate. A better rate cuts the payment per dollar borrowed. Improving your credit score before you apply is the most durable way to do this.
• Choose a longer term. A 30-year payment is lower than a 15-year, supporting a bigger loan — at the cost of more lifetime interest.
• Add a co-borrower. A spouse or partner’s income is added to yours, raising the whole budget.
• Consider a buydown. A seller- or builder-funded temporary buydown lowers your early-year payments without changing the home you qualify for.

If your existing monthly debts use up the entire DTI allowance, the calculator can’t support a loan and will tell you to reduce debt or raise income.

This isn’t the tool being broken — it’s the same wall a lender would hit. Your other debts plus the housing payment can’t exceed the back-end cap, so if debts alone are near that cap, there’s nothing left for a house. The fix is real-world, not a setting: pay down a card or loan, pay off a short-term debt, increase qualifying income, or add a co-borrower. Once the debt-to-income math clears, a price appears.

Affordability calculators differ mainly in the assumptions they bake in — the DTI cap, tax and insurance rates, whether PMI is included, and the interest rate they assume.

This calculator is transparent about all of them, and they’re yours to set:

• DTI cap — a tool assuming 50% will show a bigger number than one assuming 36%.
• Escrow costs — some tools quietly ignore taxes, insurance, or PMI, inflating the result. This one includes them.
• Rate & term — a half-point rate difference moves the price by thousands.
• Down payment — affects both the loan size and whether PMI applies.

When two calculators disagree, line up these four inputs and the gap usually closes. For the figure that actually counts, get a pre-approval — it replaces every assumption with your verified numbers.

Enter your gross monthly income, your other monthly debts, your down payment, and a rate and term — the price you can afford updates instantly.

• Type your gross monthly income (before taxes) and your total other monthly debts.
• Set your down payment, interest rate, and term (15 or 30 years).
• Pick your DTI cap for the program you’re targeting, and optionally add a front-end limit.
• Choose automatic escrow (it estimates taxes, insurance, and PMI from the price) or manual to enter exact figures, plus any HOA dues.

The result shows your maximum home price, loan amount, and a full monthly payment breakdown. Treat it as your shopping ceiling, then talk to us to turn it into a pre-approval.