Home Affordability Calculator
Find your maximum home purchase price using the same DTI ratios lenders use to approve mortgages.
How Lenders Determine Home Affordability in 2026
Conventional lenders use two key metrics to determine how much you can borrow. The front-end DTI ratio (28%) caps your housing costs — principal, interest, taxes, and insurance — at 28% of your gross monthly income. The back-end DTI (36%) caps all monthly debt obligations at 36%. Some lenders stretch these limits to 31/43 or even 45% back-end for borrowers with strong credit and reserves.
In 2026, with rates near 6.8%, a household earning $130,000/year has a maximum monthly housing payment of about $3,033 (28% rule). After backing out estimated taxes and insurance (15%), that leaves about $2,578 for P&I — supporting a loan of approximately $385,000. Adding $70,000 down brings the maximum purchase price to roughly $455,000.
Why You Might Buy Less Than the Maximum
Financial advisors often recommend keeping housing below 25% of take-home pay (not gross income). If your take-home is 70% of gross, that translates to roughly 18% of gross — significantly lower than the 28% lenders allow. Buying at the top of your qualification range leaves little margin for unexpected expenses, job changes, or future goals.