How this calculator works
Lenders look at two numbers: how much of your monthly income goes to housing, and how much goes to housing plus all your other debts. This second number is your debt-to-income ratio, or DTI. The comfortable price keeps housing at or below 31% of your income and all debts at or below 43%, which leaves room for savings and everyday costs. The stretch price uses the usual maximum for the loan program, which some buyers can reach with strong credit or extra savings.
The price also depends on your down payment. FHA needs at least 3.5% down and conventional at least 3%, so if your cash is the limit, the calculator tells you. VA loans allow 0% down for eligible borrowers and do not have a fixed DTI maximum; instead they look at residual income, the money left over each month after major bills.
Affordability questions
How much house can I afford on my income?
A common comfortable guideline is to keep your total housing payment, including taxes and insurance, at or below about 31% of your gross monthly income, and all monthly debts including housing at or below about 43%. Property tax and insurance vary a lot by state and county, so the same income can afford a very different price depending on where you buy.
What is the difference between the comfortable and stretch price?
The comfortable price follows conservative ratios that leave room in your budget. The stretch price uses the usual maximum debt-to-income ratio for the loan program, about 50% for conventional and about 56% for FHA, which may require strong credit, cash reserves or other strengths in your file. Just because a lender may approve the stretch price does not mean it fits your budget.
Do lenders use my gross income or take-home pay?
Lenders use gross income, which is your pay before taxes and deductions. That is why a payment that looks affordable on paper can feel tight on your take-home pay, so compare the estimated payment with your actual monthly budget too.
How does a VA loan change how much I can afford?
VA loans allow 0% down for eligible borrowers, have no monthly mortgage insurance and do not have a fixed maximum debt-to-income ratio. Instead, the VA looks at residual income, the money left each month after major expenses, based on family size and region. The VA funding fee is usually added to the loan unless you are exempt.
Sarah Baraz is based in San Antonio and licensed in Texas, Florida and California. Educational estimate only. This is not a loan offer, rate quote, pre-approval or commitment to lend. It does not check credit, assets or eligibility. The example rate is Freddie Mac's Primary Mortgage Market Survey national average for the week shown and is not available to every borrower. Property tax, insurance and mortgage insurance figures are planning assumptions. Programs, guidelines, rates and eligibility can change and are subject to underwriting.