How to use this calculator
Enter your annual gross income, any existing monthly debt payments, and your available down payment. Adjust the interest rate, loan term, property tax rate, insurance estimate, and HOA fees to match your local market. The calculator instantly shows three home price tiers based on real lender DTI guidelines.
The conservative tier follows the standard 28/36 rule that most conventional lenders use. The moderate tier reflects expanded guidelines some lenders accept with strong credit. The aggressive tier shows the upper limit, which may be possible but carries higher financial risk.
Understanding DTI ratios
| DTI Type | What It Measures | Recommended Limit |
|---|---|---|
| Front-end DTI | Housing costs only (PITI + HOA) | 28% or less |
| Back-end DTI | All debts including housing | 36% or less |
| FHA guidelines | More flexible for qualified buyers | 31% / 43% |
| VA loans | No front-end limit, back-end only | 41% back-end |
Frequently asked questions
What is the 28/36 rule for home buying?
The 28/36 rule is a lending guideline that says your monthly housing costs should not exceed 28% of your gross monthly income (front-end ratio), and your total monthly debt payments including housing should not exceed 36% of your gross monthly income (back-end ratio). Most conventional lenders use this as a baseline for mortgage qualification.
How much house can I afford on a $100,000 salary?
On a $100,000 annual salary with no other debts and a 20% down payment, you can conservatively afford a home in the $350,000 to $420,000 range, depending on your interest rate, property taxes, and insurance costs. The exact amount depends on local tax rates, current mortgage rates, and your total monthly debt obligations.
What is included in a monthly mortgage payment?
A monthly mortgage payment typically includes four components known as PITI: Principal (paying down the loan balance), Interest (the cost of borrowing), Taxes (property taxes, often escrowed), and Insurance (homeowners insurance, also often escrowed). If your down payment is less than 20%, you may also pay private mortgage insurance (PMI). HOA fees are an additional cost if applicable.
What is debt-to-income ratio and why does it matter?
Debt-to-income (DTI) ratio is the percentage of your gross monthly income that goes toward debt payments. Lenders use it to assess your ability to manage monthly payments and repay debts. There are two types: front-end DTI (housing costs only) and back-end DTI (all debts including housing). Lower DTI ratios generally qualify you for better rates and higher loan amounts.
Should I put 20% down on a house?
Putting 20% down is ideal because it eliminates the need for private mortgage insurance (PMI), gives you immediate equity, results in lower monthly payments, and often qualifies you for better interest rates. However, many loan programs allow as little as 3-5% down. The trade-off is higher monthly costs and more total interest paid over the life of the loan.