How Much House Can I Afford?

How it works

Lenders don't decide what you can afford by guessing — they use your debt-to-income ratio (DTI): the share of your gross monthly income that goes to debt payments. The rule of thumb is that your total debts, including the new mortgage, should stay around 36% of income for comfort, and most lenders won't go past about 43%.

This calculator works that math backwards in three steps:

• Find your monthly housing budget. We take your income, multiply by your chosen DTI, and subtract the debts you already pay. Whatever's left is what a mortgage payment can safely cost: budget = income × DTI − current debts.
• Account for the full payment. A real mortgage payment isn't just principal and interest — it also includes property tax, homeowners insurance, PMI (if you put down under 20%), and any HOA dues. All of those have to fit inside the same budget.
• Solve for the home price. We search for the largest price whose complete monthly payment lands right at your budget, then add your down payment back on top to get the home price you can afford.

Because property tax and PMI both scale with the price of the home, the answer isn't a simple division — nudge any input and the affordable price moves with it. Try raising your down payment, shopping a lower rate, or paying off a car loan, and watch the ceiling climb.

Buying together? A home is usually the biggest thing two people ever finance, and “how much house” is where a lot of couples first discover they're not on the same page. Run it here with your combined income first, then keep both of you aligned in Merger — built for two people sharing a life, no joint account required.

A worked example

Say your household brings in $70,000 a year, you pay $250 a month toward a car loan, and you've saved $20,000 for a down payment. At a comfortable 36% DTI, that's about $1,850 a month available for housing after your existing debt. Plug in a 30-year loan at 6.75% with an average property-tax rate, and you can comfortably afford a home of about $254,000 — with the full monthly payment, taxes and PMI included, sitting right at that $1,850 ceiling. Pay off the car loan and that same $250 frees up roughly $32,000 more in buying power. That's the lever most people don't realize they're holding.

Key terms

Debt-to-income ratio (DTI)

The percentage of your gross monthly income that goes to debt payments, including the mortgage you're planning for. Lenders lean on it to decide how much you can borrow — around 36% is considered comfortable, and roughly 43% is a common ceiling.

Down payment

The cash you put toward the home up front. A bigger down payment means a smaller loan and a lower monthly payment, so it directly raises the price you can afford — and at 20% it removes PMI entirely.

PMI

Private mortgage insurance — an extra monthly charge lenders add when your down payment is under 20%. It eats into your housing budget, which lowers the home price you qualify for until you reach about 20% equity.

Principal, interest, taxes & insurance (PITI)

The four pieces of a real mortgage payment. Affordability is about the whole PITI figure (plus any HOA), not just principal and interest — which is why this calculator folds them all in.