House Affordability Calculator Estimate how much home you can afford — with realistic DTI rules, PITI costs, and lender b...
House Affordability Calculator
Estimate how much home you can afford — with realistic DTI rules, PITI costs, and lender benchmarks.
Lenders use the **28/36 Rule** (or variations):
- Front-End DTI (Housing Ratio): ≤28% of gross monthly income on PITI (Principal, Interest, Taxes, Insurance)
- Back-End DTI (Total Debt Ratio): ≤36–43% including car loans, credit cards, student debt
Example: $85,000/year income ($7,083/mo): → Max housing payment: $1,983 (28%) → Max total debt: $2,550 (36%) → Available for other debt: $567/mo
2025 Reality: FHA allows up to 50% DTI with compensating factors; conventional loans typically cap at 45%.
💡 Budget for these *after* closing:
- PMI: 0.3–1.5% of loan/year if down <20% (e.g., $150/mo on $250K loan)
- Maintenance: 1% of home value/year (e.g., $3,500/yr on $350K home)
- Closing Costs: 2–5% of purchase price ($7K–$17.5K on $350K home)
- Utilities & Upgrades: $300–$600/mo (vs. $100–$200 as renter)
✅ Pro Tip: Use the **25x Rule** — your home shouldn’t cost more than 2.5–3x your *annual* income. ($85K income → $212K–$255K ideal; $320K max stretch)
- Median U.S. Home Price: $420,000 (NAR, Q1 2025)
- Avg. 30-Yr Fixed Rate: 6.8%
- Income Needed for $400K Home (20% down, 36% DTI): ~$95,000
- First-Time Buyer Age: 36 (highest in 40 years)
- Down Payment Sources: 48% savings, 25% parents, 12% 401(k) loan
Good news: In 52% of U.S. counties, median home is still affordable on median income (per NCHS).
➡️ Basic Mode
Quick estimate using income, debt, and down payment %.
➡️ Detailed Mode
Factor in taxes, insurance, HOA, and your target DTI for precision.
➡️ Rent vs. Buy
Compare long-term costs: equity growth vs. rent inflation + investment returns.
Note: Uses *gross* income (before taxes), not take-home pay.