How Much House Can I Afford? 2026 Calculator
Find your maximum home price using the 28/36 rule, with both Comfortable (28%) and Stretch (36%) budgets shown side by side. Compare FHA, VA, USDA, and Conventional paths. Free, ad-free, no sign-up.
| Strategy | Front DTI | Max Price | Monthly |
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Affordability vs Pre-Approval — Two Different Numbers
One of the most important distinctions in home buying: pre-approval is what a bank will lend you. Affordability is what you should actually spend. The two numbers are usually very different.
Banks measure your maximum borrowing capacity using your gross income and a back-end DTI cap of 43–50%. They don't care about your retirement saving, kids' college, vacation budget, or how much you spend on hobbies. A bank may pre-approve you for a $500,000 home, but living comfortably in that home — with retirement contributions, an emergency fund, vacations, and unexpected costs — may require capping your purchase at $380,000.
This calculator shows you both numbers: the Comfortable (28% front-end / 36% back-end) max price you can sustain without lifestyle compression, and the Stretch (36% front-end / 50% back-end) max price representing the upper bound a bank might approve.
The Formula
- Subtract estimated monthly property tax, insurance, PMI, and HOA from Max PITI to get Max P&I.
- Convert Max P&I into Max Loan using the present-value-of-annuity formula:
L = PMT × [1 − (1 + r)−n] / r - Add your down payment:
Max Home Price = Max Loan + Down Payment
The 28/36 Rule — With a Worked Example
28% — Your monthly housing costs (PITI + HOA) should not exceed 28% of gross monthly income (the front-end ratio).
36% — Your total monthly debt payments (housing + auto + student loans + credit cards) should not exceed 36% of gross monthly income (the back-end ratio).
Note: this calculator's result is slightly higher because it iterates the property-tax math against the actual home price (which slightly increases tax as price rises).
How Much House Can Different Incomes Afford?
Reference table — assumes 28% front-end DTI, 20% down, 6.5% interest, 30-year term, 1.2% property tax, $1,200 insurance, and no other debts.
| Annual Income | Max Home Price | Down (20%) | Monthly PITI |
|---|---|---|---|
| $50,000 | $170,000 | $34,000 | $1,167 |
| $75,000 | $255,000 | $51,000 | $1,750 |
| $100,000 | $340,000 | $68,000 | $2,333 |
| $125,000 | $425,000 | $85,000 | $2,917 |
| $150,000 | $510,000 | $102,000 | $3,500 |
| $200,000 | $680,000 | $136,000 | $4,667 |
| $300,000 | $1,020,000 | $204,000 | $7,000 |
Calculated using TopFinClub's affordability solver. Real-world numbers vary by location, credit score, exact tax/insurance, and lender overlays.
Loan Product Comparison
Different US mortgage programs use different DTI caps, down payment minimums, and credit score requirements — directly affecting how much house you can afford.
| Loan | Min Down | Min FICO | DTI Cap | Best for |
|---|---|---|---|---|
| Conventional | 3% / 5% | 620 | 43% (50% w/ AUS) | Most buyers with 620+ credit |
| FHA | 3.5% | 580 | 31 / 43% (up to 40 / 50% w/ comp factors) | Lower credit / first-time buyers |
| VA | 0% | ~580 (lender) | 41% + residual income | Veterans & eligible spouses |
| USDA | 0% | ~640 (lender) | 29 / 41% | Rural / low-to-moderate income |
| Jumbo | 10–20% | 700+ | ~43% | Loans above $806,500 (HCOL areas) |
Sources: HUD Handbook 4000.1, VA Lenders Handbook M26-7, USDA HB-1-3555, Fannie Mae Selling Guide B3-6-02, FHFA conforming loan limits.
Closing Costs & Cash Reserves — The Hidden Cash Need
The down payment is rarely the only cash you need. Plan for three buckets:
- Down payment — 3% to 20% of purchase price depending on loan program.
- Closing costs — typically 2% to 5% of the loan amount. On a $400,000 loan, that's $8,000 to $20,000. Includes loan origination, appraisal, title insurance, recording fees, and prepaid taxes/insurance.
- Cash reserves after closing — financial planners recommend 3 to 6 months of total PITI as an emergency fund. A $2,500 monthly PITI means $7,500 to $15,000 in liquid reserves.
For a $400,000 home with 20% down at $2,500/month PITI, the full cash plan is approximately $80,000 (down) + $12,000 (closing) + $15,000 (reserves) = $107,000 in liquid savings before buying. Underestimating any bucket causes financial stress in the first year of homeownership.
Tips to Increase Your Affordable Budget
- Improve your credit score. A 60-point FICO bump can lower your rate by 0.5–1%, increasing affordability by $20,000–$40,000.
- Pay down revolving debt. Each $100/month in eliminated debt (credit cards, auto loans) frees up capacity for $15,000–$20,000 more home price.
- Increase your down payment. Going from 10% to 20% down eliminates PMI, freeing $100–$300/month for principal — typically worth $20,000–$60,000 in additional price.
- Consider a 30-year term over 15. Lower monthly payment = higher max price (at the cost of more lifetime interest).
- Move to a lower-tax state. Texas at 1.8% property tax and Illinois at 2.1% require much lower max prices than Hawaii at 0.27% or Alabama at 0.41%.
- Consider a co-borrower. Adding a spouse or family member's income directly increases qualifying income — but also their debts.
How to Use This Calculator
- Enter your annual gross income (before taxes; combine spouses if applying jointly).
- Enter your existing monthly debt payments — auto loans, student loans, credit card minimums.
- Enter your available down payment.
- Set the interest rate from your lender quote or the current Freddie Mac PMMS national average.
- Read both Comfortable and Stretch budgets in the result panel. Compare to the cash-needed-at-closing card.
- Use the affordability table below to see how your number compares to other income tiers, and the loan-product comparison to find the best program for your situation.
Methodology & Assumptions
- Solves the maximum home price using a binary search over the 28% front-end DTI ratio (Comfortable) and 36% (Stretch).
- Applies estimated monthly property tax (% of home price), insurance (~0.5%), and excludes HOA and PMI from the v1 solver.
- Closing costs estimated at 3% of loan amount (midpoint of 2–5% range).
- Cash reserves estimated at 3 months of monthly PITI.
- All math runs in your browser; no data leaves your device.
Glossary
- DTI (Debt-to-Income)
- The percentage of your gross monthly income going to debt payments. Front-end = housing only; back-end = housing + all other debt.
- PITI
- Principal, Interest, Taxes, Insurance — the four components of a mortgage payment.
- PMI (Private Mortgage Insurance)
- Required on conventional loans with less than 20% down. Typically 0.3–1.5% of loan amount per year. Auto-removes at 78% LTV.
- MIP (Mortgage Insurance Premium)
- The FHA equivalent of PMI. Includes upfront 1.75% (UFMIP) and annual 0.55%–0.85%. Lasts loan life unless 10%+ down.
- LTV (Loan-to-Value)
- Loan amount divided by appraised value, expressed as a percentage. Lower LTV = better rate and no PMI requirement.
- Pre-approval
- A lender's conditional commitment to lend up to a certain amount based on documented income, credit, and debt. Stronger than pre-qualification but not final approval.
- Compensating factors
- Strong elements (large reserves, high credit, low LTV) that justify lender exceptions to standard DTI caps.
- Front-end ratio
- Housing costs (PITI + HOA) divided by gross monthly income. Most lenders cap at 28–31%.
- Back-end ratio
- Total monthly debt payments (housing + all other debt) divided by gross monthly income. Most lenders cap at 36–50%.
- Conforming loan limit
- Maximum loan size eligible for purchase by Fannie Mae/Freddie Mac. $806,500 in most US counties for 2025; higher in HCOL areas. Loans above the limit are "jumbo."
Frequently Asked Questions
Following the 28/36 rule, $100,000 gross income ($8,333/month) supports up to $2,333/month housing. At 6.5% interest with 20% down, that translates to roughly $340,000–$420,000 max home price depending on existing debts and credit. With $500/month other debt, plan on the low end.
$75,000 gross ($6,250/month) gives a $1,750 PITI cap under 28/36. At 6.5% with 10% down, that's roughly $255,000–$290,000 max home price. FHA at 31/43 stretches slightly higher but adds MIP for the loan's life unless you put down 10%+.
Monthly housing costs (PITI + HOA) ≤ 28% of gross monthly income. Total monthly debt (housing + other) ≤ 36%. For $100k income that's $2,333 max housing and $3,000 max total debt. Most US conventional lenders use this guideline; FHA stretches to 31/43.
A more aggressive alternative — 35% on housing, 45% on total debt. Some lenders allow this for borrowers with excellent credit, large reserves, or stable high income. Common in HCOL coastal markets. Treat as a stretch budget, not a recommendation.
Four primary factors: (1) DTI ratio capped at 43–50% per loan program, (2) credit score (drives both approval and rate), (3) down payment / LTV (affects PMI and risk), (4) documented income and employment history (typically 2 years). Automated underwriting (Fannie's DU, Freddie's LP) scores these together.
Plan three buckets: (1) down payment (3–20% of price), (2) closing costs (2–5% of loan = $8K–$20K on a $400K loan), (3) cash reserves (3–6 months PITI). For a $400K home with 20% down at $2,500 PITI, plan ~$107,000 total liquid savings.
The traditional answer is 28% gross. The Federal Reserve SCF shows the median US homeowner spends 19% of pre-tax income on housing, while renters spend ~23%. HUD considers households spending 30%+ "cost-burdened" and 50%+ "severely burdened." Aim for 25–28% to leave room for retirement and emergencies.
Significantly. FICO 760+ may get a 6.5% rate while 620–639 pays 7.5%+ — a full point difference. On a $300K loan that's $200/month and ~$72K over 30 years. Improving credit by 60 points before applying often increases affordability by $20K–$40K in max home price.
Debt-to-Income ratio = monthly debt ÷ gross monthly income. Front-end DTI = housing only; back-end = housing + all other debts. Conventional caps back-end at 43%; FHA at 43% (50% w/ comp factors); VA uses residual income. Lower DTI = better approval and rate.
Lenders typically require 0–6 months of PITI in liquid reserves. Fannie 2 months, Freddie 1–6 months, FHA generally none for owner-occupied. Beyond lender requirements, planners recommend 3–6 months of total PITI as your own emergency fund. Self-employed and investment-property buyers need more.
Yes, but they count toward back-end DTI. Fannie uses actual payment or 1% of balance; Freddie 0.5% of balance; FHA the greater of actual or 0.5%. A $50K balance under FHA imputes ~$250/month, reducing max home price by ~$40K–$50K. Income-driven repayment plans typically count at the actual payment if documented.
Yes in three ways: (1) smaller loan needed for the same payment = higher max price; (2) eliminates PMI at 20% down (frees $100–$300/month for principal); (3) improves credit profile (lower LTV) for better rate. A $20K bump in down typically increases max home price by $30K–$50K.