How Much House Can I Afford?
Find your maximum home price from income, debts and down payment using lender debt-to-income limits, with property tax by state, insurance, PMI or FHA mortgage insurance, HOA and closing costs.
Household income before taxes, for everyone on the loan.
Car, student loans, minimum card payments, other loans. Not rent, utilities or groceries.
Conventional: 3% minimum down; PMI applies below 20% down.
Percent of the purchase price.
Freddie Mac 30-year average 7.32% (Oct 22, 2026). 15-year loans usually price lower; use your quote if you have one.
Texas average effective rate: 1.40% (US 0.90%). County rates vary; use the listing's tax bill if you have one.
Varies widely by state and home; coastal and storm-prone areas cost more. Get a quote.
Only charged below 20% down. Typical: 0.36%–0.84% ($30–$70 a month per $100,000, Freddie Mac); higher with lower credit scores.
Typically 2%–5%. Paid in cash at closing, on top of the down payment.
28% is the conventional guideline, 31% FHA. Leave blank to skip it, as automated underwriting often does.
36% classic, 43% common lender and FHA limit, up to 50% with strong credit and reserves.
Rates verified October 2026 · Sources: Freddie Mac PMMS (Oct 22, 2026); Tax Foundation, Facts & Figures 2026 (effective property tax rates, 2024 data); HUD Mortgagee Letter 2023-05 (FHA MIP, now in Handbook 4000.1); Freddie Mac, Breaking down PMI. Rates are averages, not offers. Lenders also weigh credit score, reserves and loan limits.
- Principal & interest
- $1,734.21
- Property tax (1.4% a year)
- $327.26
- Homeowners insurance
- $166.67
- PMI (0.5% a year)
- $105.19
- HOA dues
- $0.00
- Total
- $2,333.33
PITI = P&I + tax + insurance + PMI + HOA = $1,734.21 + $327.26 + $166.67 + $105.19 + $0.00 = $2,333.33
P&I = L × r(1 + r)^n ÷ ((1 + r)^n − 1), L = $252,458, r = 7.32% ÷ 12, n = 360
Max price = highest price where PITI ≤ $2,333.33 → $280,509
| Scenario | DTI limits | Max price | Payment | Total DTI |
|---|---|---|---|---|
| Conservative | 28% / 36% | $280,509 | $2,333 | 34.0% |
| Moderate | 28% / 43% | $280,509 | $2,333 | 34.0% |
| Aggressive | 50% total only | $453,130 | $3,667 | 50.0% |
Same rate, down payment and costs in each row. Conservative follows the 28/36 rule; aggressive uses only a 50% total DTI cap, the most automated underwriting typically allows with strong credit and cash reserves.
| Change | Max price | Difference |
|---|---|---|
| Rate 0.5 points lower (6.82%) | $291,964 | +$11,455 |
| $10,000 more down ($38,051) | $289,129 | +$8,620 |
| $300 less in monthly debts | $280,509 | No change |
| $10,000 more annual income | $310,718 | +$30,209 |
Paying down debts doesn't help while the housing ratio is the binding limit; a lower rate, more cash down or higher income does.
$28,051 down + $8,415 closing costs (3% of price). The typical 2%–5% range is $5,610 to $14,025. Keep a few months of payments in reserve too.
$2,333 payment + $234 upkeep (1% of value a year) − $201 principal you keep as equity (first-year average). If comparable rent is well below this, renting may be cheaper; try the Rent vs Buy Calculator.
- Using take-home pay instead of gross income: lenders use pre-tax income, so a lender's maximum can feel tight on your real budget.
- Leaving out property tax, insurance and HOA: they can add a third or more to the principal and interest payment.
- Forgetting closing costs and moving expenses, then draining the emergency fund to close.
- Opening a new car loan or credit card before closing: it raises your DTI and can shrink or cancel an approval.
- →Get pre-approved by two or three lenders on the same day; rate quotes can differ by half a point or more.
- →If debts are your binding limit, paying off a small loan before you apply can raise your budget more than saving the same cash for the down payment.
- →Ask the listing agent for the actual property tax bill: newly sold homes are often reassessed at the purchase price.
- →Next step: plug a specific home price into our Mortgage Calculator to see the full amortization schedule.
This tool is for informational purposes only. Always verify results with a qualified professional.
What is the How Much House Can I Afford??
This home affordability calculator answers the question every buyer asks first: how much house can I afford? Instead of starting from a price, it works backwards from your income. Enter your annual gross income, your monthly debt payments, your down payment, the mortgage rate and term, and your state's property tax rate, plus homeowners insurance, HOA dues and PMI. The calculator finds the highest home price whose full monthly payment (principal, interest, taxes, insurance, mortgage insurance and HOA, often called PITI) fits inside the debt-to-income limits lenders use, and tells you which limit is holding you back.
Lenders use two debt-to-income (DTI) ratios. The front-end or housing ratio compares your total monthly housing payment with your gross monthly income; the traditional guideline is 28% for conventional loans and 31% for FHA loans. The back-end or total ratio adds every other monthly debt payment, such as car loans, student loans, minimum credit card payments and personal loans; the classic guideline is 36%, many lenders approve up to 43% (FHA's standard limit), and automated underwriting can go to about 50% with strong credit and reserves. Your maximum housing payment is the lower of the two limits, and the price you can afford is the one whose PITI equals that payment.
Worked example: a household earning $100,000 a year has gross monthly income of $8,333.33. The 28% housing limit allows $2,333.33 a month and the 36% total limit allows $3,000 minus $500 of other debts, or $2,500, so the housing ratio is the binding limit. With 10% down, a 30-year fixed rate of 7.32% (Freddie Mac's average for the week of October 22, 2026), the Texas average effective property tax rate of 1.40%, $2,000 a year of insurance and 0.5% PMI, the maximum price is about $280,509. That is a $28,051 down payment and a $252,458 loan, with monthly principal and interest of $1,734.21, property tax of $327.26, insurance of $166.67 and PMI of $105.19, totalling $2,333.33. Total DTI is 34%. A rate half a point lower raises the budget to about $291,964, and $10,000 more down raises it to about $289,129.
Mortgage insurance changes the math when you put less than 20% down. On a conventional loan, private mortgage insurance (PMI) typically costs about $30 to $70 a month for every $100,000 borrowed according to Freddie Mac, and it can be cancelled once you reach 20% equity. FHA loans need only 3.5% down but charge an upfront mortgage insurance premium of 1.75% of the loan, usually added to the balance, plus an annual premium of 0.50% to 0.55% for most 30-year loans under HUD's schedule. With less than 10% down, FHA annual premiums last for the life of the loan.
The result is a lender-style maximum, not a recommendation. Before you shop, look at the conservative, moderate and aggressive comparison, check the closing costs and cash you need at signing (typically 2% to 5% of the price on top of the down payment), and compare the monthly cost of owning with your current rent. Copy the link to your result to share the exact scenario with a partner or loan officer.
How to Use This Calculator
- 1Enter your annual gross income before taxes and the total of your monthly debt payments: car loans, student loans, minimum credit card payments and any other loans.
- 2Enter your down payment as a percentage of the price or as a cash amount, and choose a conventional or FHA loan.
- 3Check the interest rate (pre-filled with Freddie Mac's latest 30-year average), pick a 15, 20 or 30-year term, and select your state to pre-fill its average property tax rate.
- 4Add your homeowners insurance, HOA dues and PMI rate, then choose a 36%, 43% or 50% back-end DTI limit.
- 5Read your maximum home price, loan amount and monthly payment breakdown, and see whether your income or your debts set the limit.
- 6Compare the conservative, moderate and aggressive scenarios, see what raises your budget, check closing costs and the rent-equivalent, then copy the link to share.