How lenders actually think about this
Most conventional lenders cap total monthly debt — housing plus every other required payment — at somewhere around 36% of gross monthly income, though some programs allow more. This calculator starts from that ceiling, subtracts your existing debts, and solves for the home price whose total housing payment (principal, interest, tax, insurance and HOA) fits inside what's left.
A worked example
A household earning $90,000 a year with $300 in other monthly debt, a $40,000 down payment, at 6.5% over 30 years and a 36% DTI ceiling, comes out to a home price of roughly $350,400 — a maximum loan of about $310,400 on top of the down payment.
Frequently asked questions
Why does this ask for a DTI percentage instead of just my income?
Lenders qualify borrowers primarily by debt-to-income ratio, not income alone — two people with identical income but different existing debt can qualify for very different loan amounts. The 36% default reflects a commonly used conventional-loan guideline; some programs allow higher.
Why is the math iterative instead of a single formula?
Property tax here is calculated as a percentage of the home price, but the home price depends on how much loan payment is left over after tax and insurance — each affects the other. This calculator solves that circular relationship for you automatically.
Does a higher down payment always increase what I can afford?
Yes, directly — every dollar of down payment is a dollar of home price that doesn't need financing. It also lowers your loan-to-value ratio, which can mean a better rate or avoiding PMI altogether, stretching affordability further than the down payment amount alone suggests.
Should I borrow the maximum this calculator shows?
Not necessarily. This shows a ceiling based on common lending guidelines, not a comfortable budget. Many financial planners suggest staying meaningfully under the max, especially if income could be variable or other large expenses are on the horizon.
This calculator provides estimates for general informational purposes only and is not a loan pre-approval or financial advice. Actual qualification depends on credit score, reserves, debt types and the specific lender and loan program.