Lenders approve you based on ratios, not vibes. This calculator applies the 36% back-end rule — your total monthly debts including the new mortgage shouldn't exceed 36% of gross income — and works backwards to the maximum home price.
Affordable housing budget = monthly gross income × 0.36 − other monthly debts − monthly property tax − monthly insurance. That budget is converted to a maximum loan amount with the same amortization formula as the mortgage calculator, then your down payment is added back.
| Gross annual income ($) | Max home price |
|---|---|
| 45,000 | $111,194.87 |
| 67,500 | $217,987.17 |
| 90,000 | $324,779.48 |
| 135,000 | $538,364.08 |
| 180,000 | $751,948.69 |
Every number above is computed by the same in-browser engine as the calculator — nothing is hardcoded.
Underwriting boils down to two ratios. The front-end ratio caps housing costs, PITI, at 28 percent of gross monthly income. The back-end ratio caps all recurring debt, housing plus auto loans, student loans, minimum card payments and alimony, at 36 percent for most conventional loans, though FHA allows up to about 43 to 50 percent with compensating factors and some automated approvals stretch further. This calculator works backward from the stricter back-end number: it subtracts your existing debts, estimated tax and insurance from 36 percent of gross income, then converts what remains into a loan amount with the same amortization math a lender uses. The output is a qualification ceiling, not a comfort target. Lenders never ask whether you save for retirement, pay for childcare, or want to travel, which is why borrowers approved at 36 percent often feel house poor within a year.
A 36 percent back-end approval ignores the expenses that do not appear on a credit report. Daycare runs $8,000 to $15,000 per year per child in most metros, retirement contributions should be 10 to 15 percent of gross income, and homeownership carries maintenance that averages 1 to 2 percent of the home value annually. Add utilities, which are higher than in a rental, and the real budget squeeze becomes clear. A household approved at $3,000 per month PITI on $100,000 of gross income still needs roughly $1,500 per month for retirement, maintenance and childcare to stay financially healthy, which the lender math never sees. Run this calculator, then subtract those missing categories from your monthly budget by hand. If the result is uncomfortable, aim 10 to 20 percent below the approved ceiling. The bank approves the maximum; you choose the sustainable.
Ratios use gross income because that is what appears on your W-2, but you live on take-home pay, and the gap is large at six-figure salaries. A single filer earning $100,000 in 2026 pays about $14,000 in federal tax after the standard deduction, $7,650 in FICA, and state tax where applicable, leaving roughly $6,300 per month. A 36 percent back-end approval of $3,000 therefore consumes nearly half of actual cash flow, not 36 percent of it. Married filers with children come out better because of the larger standard deduction and child tax credits, while high earners in states like California or New York see take-home fall further. Before accepting any price near the ceiling, run the gross number through the salary calculator and divide the real monthly net by your housing figure. A payment above about 35 percent of take-home pay leaves little room for saving, and that is the ratio that decides whether the house feels like an asset or an anchor.
Housing costs should be at most 28% of gross monthly income, and total debt payments at most 36%. Most conventional lenders enforce the 36% back-end.
Yes — every extra dollar down is a dollar of price you can add, since it doesn't increase the loan.
Yes — enter your area's annual property tax and insurance so the affordability number reflects the true PITI payment.
The conventional floor is 3 percent for first-time buyers and 5 percent generally; FHA requires 3.5 percent with a credit score of 580 or higher; VA and USDA loans go to zero down for eligible borrowers. Under 20 percent down you will pay PMI, typically 0.2 to 2 percent of the loan per year, which counts against your 36 percent back-end ratio and therefore lowers the price you qualify for. Enter your realistic cash amount, keep a reserve for closing costs of 2 to 5 percent of the price, and treat any down payment below 20 percent as a PMI scenario when reading the result.
Sometimes. Most conventional lenders will count 75 percent of documented market rent from an existing property, and Fannie Mae allows non-occupant cosigners whose income can support the debt ratios. Freelancers usually need two years of tax returns before lenders average their income, and recent overtime or bonuses count only with a two-year history. Student loans on an income-driven plan are counted at the actual payment, which can be as low as $0, helping some borrowers more than a raise would. Each lender applies overlay rules, so ask which income sources they will document before you shop.
Lenders require reserves on some loans, typically two months of PITI for conventional loans with less than 10 percent down, and FHA and VA generally require none. Practically, keep three to six months of full housing costs in a high-yield savings account after closing. On a $2,500 monthly PITI payment that is $7,500 to $15,000 of untouched cash, separate from the down payment and closing costs. If the calculator output forces reserves below that level, lower the target price; a house that consumes every dollar is one furnace failure away from credit card debt.