Enter your income, existing debts, and down payment — this works backwards from your target debt-to-income ratio to find the maximum home price, not the other way around.
This tool starts from your annual income and target debt-to-income (DTI) ratio to find the maximum total monthly debt payment a lender would allow, then subtracts your existing monthly debts (car loans, student loans, credit cards, and similar) to see how much room is left for a house payment. It then solves algebraically for the one home price whose principal & interest, property tax, insurance, and HOA add up to exactly fill that remaining room — a direct closed-form calculation rather than guessing a price, computing its payment, and adjusting up or down until it fits.
Many conventional mortgage lenders cap "back-end" DTI — all monthly debts combined, including the new mortgage payment — somewhere in the 36% to 43% range, and FHA-backed loans can sometimes go higher depending on compensating factors like credit score and cash reserves. 36% is a conservative, commonly cited default and is what this calculator starts with, but your real limit depends on the lender, loan program, and your overall credit profile.
Yes — property tax, home insurance, and any HOA fee are folded directly into the affordability ceiling itself, not layered on afterward. That's the key difference from the plain Mortgage Calculator, which starts from a home price you've already chosen and computes what the monthly payment would be. This tool runs the opposite direction: it starts from your income and works backwards to the home price your budget can actually support.
PMI isn't included in this calculation. If your down payment will land under 20% of the home price, expect your real affordable price to be somewhat lower than what's shown here, since PMI is an additional monthly cost competing for the same DTI room as principal, interest, tax, and insurance. See the Down Payment Calculator, a companion tool, for a dedicated PMI estimate based on your down payment size.
Not necessarily. A lender's approved maximum reflects what you qualify for on paper, not what's comfortable month to month — it doesn't reserve anything for savings, retirement contributions, home repairs, or an emergency fund. Many buyers deliberately target a price meaningfully below the calculated ceiling, and it's worth also checking the dedicated Debt-to-Income Calculator to see exactly where a given home price would put your overall DTI before committing.
Worked example: with $90,000 annual income, $400/month in existing debts, a $40,000 down payment, 6.5% interest over 30 years, a 36% max DTI, 1.2% property tax, 0.5% insurance, and no HOA, the maximum monthly debt payment allowed is $2,300 ($90,000 ÷ 12 × 36% = $2,700, minus $400 of existing debts). Solving directly for home price gives a maximum of about $329,936, with a maximum loan amount of about $289,936 — the $40,000 down payment covers about 12.1% of that price. The estimated monthly payment (principal, interest, tax, and insurance) comes out to the full $2,300 by construction, since that's exactly the number the formula solved for.