Home Affordability Calculator
Calculate how much house you can comfortably afford based on your income and debts.
Maximum Price at 36% DTI
$0
Principal and interest only. Add taxes, insurance, PMI and HOA dues to Monthly Debts to include them.
What this calculator does
This calculator estimates the highest home price whose mortgage payment fits inside a 36% total debt-to-income (DTI) ratio. You enter gross annual income, the monthly payments on debts you already carry, the cash you plan to put down, and a mortgage rate. It reports the maximum price, the monthly payment that price implies, and the 30-year loan behind it. It is for buyers who want to know, before talking to a lender, roughly where a debt-ratio ceiling falls for their income and debts, and how much that ceiling moves when the rate, the debts, or the down payment change.
The result is a ceiling set by one underwriting ratio. It is not a statement of what a household can comfortably pay each month, and it is not a loan approval. Lenders also look at credit history, cash reserves, the property, and the loan program, and the sections below show which DTI limits different programs use.
How the math works
The Consumer Financial Protection Bureau defines DTI as all monthly debt payments divided by gross monthly income, and notes that different loan products and lenders will have different DTI limits. The calculator uses 36%, the maximum total DTI that Fannie Mae sets for manually underwritten loans.
It divides annual income by twelve, multiplies by 0.36 to get the maximum total monthly debt, and subtracts the existing monthly debts you enter. The remainder is the monthly mortgage payment. It then inverts the fixed-rate amortization formula, loan = payment × (1 − (1 + r)−360) / r, where r is the annual rate divided by twelve, to find the 30-year loan that payment supports, and adds the down payment to get the price. The whole remainder is treated as principal and interest. Lenders count the full housing payment in DTI, including property taxes, homeowners insurance, mortgage insurance and association dues, so the section after the worked example shows how to include those costs.
Worked example
These are the calculator's default inputs: a household earning $90,000 a year with $500 a month of student loan and auto payments, a $40,000 down payment, and a 6.5% mortgage rate.
- Gross monthly income: $90,000 ÷ 12 = $7,500.
- Maximum total debt at 36%: $7,500 × 0.36 = $2,700.
- Payment left for the mortgage: $2,700 − $500 = $2,200.
- Loan amount: a $2,200 monthly principal-and-interest payment at 6.5% over 30 years supports a loan of $348,064.
- Maximum price: $348,064 + $40,000 down = $388,064.
At these inputs every $100 of existing monthly debt removes $15,821 from the maximum price, because each dollar of debt payment is a dollar that cannot go to the mortgage, and at 6.5% a dollar of monthly payment supports about $158 of loan. A $400 car payment therefore costs about $63,000 of purchasing power under this ratio.
Why the result is a ceiling: taxes, insurance, PMI and HOA dues
When Fannie Mae calculates total monthly obligation for a principal residence, it uses PITIA: principal, interest, property taxes, homeowners insurance and association dues, plus mortgage insurance where it applies (Selling Guide B3-6-02). The VA rule is the same in substance: its ratio adds principal, interest, taxes and insurance to special assessments, condominium and homeowners association fees and long-term obligations (38 CFR 36.4340(d)). This calculator spends the whole 36% allowance on principal and interest, so the price it shows is higher than a lender working from the same ratio would reach.
To get a figure closer to how a lender counts, add your expected monthly property tax, insurance, mortgage insurance and HOA dues to the Monthly Debts field. Reserving a dollar for those costs is arithmetically the same as carrying a dollar of other debt, so the result becomes a PITIA-based ceiling. The table uses the worked example and adds each reserve amount to the $500 of existing debts.
| Monthly taxes, insurance, PMI, HOA | Principal and interest left | Loan supported | Maximum price |
|---|---|---|---|
| $0 (calculator default) | $2,200 | $348,064 | $388,064 |
| $300 | $1,900 | $300,601 | $340,601 |
| $500 | $1,700 | $268,958 | $308,958 |
| $700 | $1,500 | $237,316 | $277,316 |
A $500 monthly reserve lowers the ceiling by $79,106, about a fifth of the headline figure. Property tax rates, insurance premiums and HOA dues vary widely by county and building, so the amounts in the table are illustrations, not estimates for any location. A listing's tax history and an insurance quote give the real inputs.
Which DTI limit applies to your loan
There is no single legal DTI limit. Federal rules require the lender to consider DTI, not to cap it at one number. The general Qualified Mortgage definition in 12 CFR 1026.43(e)(2) requires the creditor to consider the consumer's monthly debt-to-income ratio or residual income, and it limits the loan's price relative to the average prime offer rate. It does not set a fixed DTI percentage. The limits come from the program the loan is made under.
| Program and underwriting | Total DTI limit | Income to enter to model it | Maximum price, worked example |
|---|---|---|---|
| Fannie Mae, manually underwritten | 36% | $90,000 (as entered) | $388,064 |
| VA home loan, ratio standard | 41% (residual income also tested) | $102,500 | $447,393 |
| Fannie Mae, manual, meeting credit score and reserve requirements | up to 45% | $112,500 | $494,856 |
| Fannie Mae, Desktop Underwriter | 50% maximum | $125,000 | $554,185 |
The calculator's ratio is fixed at 36%. To model a higher limit, scale the income you enter by the new limit divided by 36%. For 41%, $90,000 × 41 ÷ 36 = $102,500. That gives the same monthly allowance a 41% ratio would give on the real income, which is how the right-hand column was produced. Moving from 36% to 50% adds $166,121 to the ceiling in the example. Those prices still exclude taxes, insurance and dues, and each program adds conditions of its own: the VA also requires enough residual income left after shelter costs to meet living expenses, and Fannie Mae's higher limits depend on credit score, reserves and the automated underwriting result.
How the mortgage rate moves the ceiling
Income and debts fix the monthly payment. The rate decides how much loan that payment buys. With the $2,200 payment from the worked example held constant, the ceiling changes as follows.
| Mortgage rate | Loan supported by $2,200/month | Maximum price with $40,000 down |
|---|---|---|
| 5.5% | $387,468 | $427,468 |
| 6.0% | $366,942 | $406,942 |
| 6.5% | $348,064 | $388,064 |
| 7.0% | $330,677 | $370,677 |
| 7.5% | $314,639 | $354,639 |
Each half point costs between about $16,000 and $20,500 of price at this payment, and the step is larger at lower rates. The down payment works differently. It adds to the price dollar for dollar and does not change the payment, because the calculator does not model mortgage insurance. In practice, a down payment below 20% usually brings mortgage insurance, which uses up part of the same monthly allowance and belongs in the reserve described above.
Frequently Asked Questions
What is the 36% DTI rule?
It is the maximum total debt-to-income ratio Fannie Mae sets for manually underwritten loans: all monthly debt payments, including the new housing payment, divided by gross monthly income, may not exceed 36%. Fannie Mae allows up to 45% on manually underwritten loans that meet its credit score and reserve requirements, and up to 50% for loans underwritten through Desktop Underwriter. Other programs set their own limits.
Does the result include property taxes and insurance?
No. The calculator treats the whole payment left under the 36% ratio as principal and interest. Lenders count property taxes, homeowners insurance, mortgage insurance and association dues in the housing payment. To include them, add your monthly estimate for those costs to the Monthly Debts field and the result becomes a ceiling based on the full housing payment.
Should I include utilities in my monthly debts?
No. The DTI ratio counts debt obligations such as auto loans, student loans and card minimum payments, plus the housing payment itself. Utilities, groceries and phone bills are living costs, not debts, and are not in the ratio. VA underwriting covers living costs separately with a residual income test: the income left after shelter expenses and other obligations must be enough for the household's living expenses.
Is there a legal maximum debt-to-income ratio for a mortgage?
Not a single one. Under the general Qualified Mortgage rule in 12 CFR 1026.43(e)(2), the lender must consider the borrower's debt-to-income ratio or residual income, and the loan's pricing is limited relative to the average prime offer rate, but no fixed DTI percentage is set. The limits borrowers meet come from the loan program, such as Fannie Mae's 36%, 45% and 50% tiers or the VA's 41% standard.
Does a larger down payment increase my affordability?
In this calculator, each extra dollar down raises the maximum price by one dollar, because the monthly payment is fixed by income and debts and the down payment is added on top of the loan. In practice a down payment of 20% or more usually also removes mortgage insurance, which frees part of the monthly allowance for principal and interest and raises the ceiling further.
Sources
Disclaimer: This tool is for educational and scenario-analysis purposes only. It does not constitute financial, tax, legal, or investment advice. Always consult a licensed CPA or financial advisor regarding your specific situation. The default 6.5% rate is an example input, not a quoted market rate.
Built and verified by The Breakeven Math — last reviewed September 18, 2026. DTI limits checked against the Fannie Mae Selling Guide, 38 CFR 36.4340 and 12 CFR 1026.43 on that date.