How Much House Can I Actually Afford?
Not what a listing site tells you. What the underwriting ratios actually allow — and which one of them is the thing holding you back.
Your finances
The assumptions
You can afford about
Every lender and every loan program sets its own limits, so your real number can land higher or lower than this. Want the actual figure for your situation? Leave your email below and I will run your real numbers for you.
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The two ratios that decide everything
Affordability is not a feeling and it is not a listing price filter. It comes down to two ratios, and a lender is looking at both.
Front end DTI compares your housing payment alone to your gross monthly income. Back end DTI compares your housing payment plus every other monthly debt — car loans, student loans, minimum credit card payments — to that same income. Whichever ratio runs out of room first is the one that caps you. This calculator tells you which one that is, because that is the number you can actually go do something about.
If the back end ratio is binding, your problem is not the house. It is the car payment. Paying off a $450 a month car loan can move your buying power by tens of thousands of dollars, and it is almost always the highest leverage move a borrower can make before applying.
Why your gross income is the input
Lenders qualify you on gross income, before taxes. You live on net. That gap is the reason a loan can be approved and still feel tight, and it is why the maximum a lender will lend you is not automatically the amount you should borrow. The ratios above are a ceiling, not a target. Comfortable is usually a good deal below the ceiling.
For the loan officers reading this
The binding ratio is the whole conversation. If a client comes in $40k short on price and the back end is what is capping them, you have an actionable plan — pay down or restructure the revolving debt, and re run it. If the front end is binding, no debt paydown helps and you are talking about income, down payment, or a different price band. Diagnose which one before you tell anyone what they can afford.
Common questions
What DTI do lenders actually allow?
It varies by loan program, by the strength of the rest of the file, and by the automated underwriting decision. The defaults here are conservative and commonly used, but they are not a rule, and plenty of loans are approved above them. Treat this as an estimate, not an approval.
Does the maximum I qualify for mean I should spend it?
No. It is a ceiling produced by ratios, and the ratios do not know about your childcare costs, your savings goals, or your risk tolerance. The number this tool returns is what the math permits, not what is wise.
How do I increase how much house I can afford?
In rough order of leverage: reduce monthly debt payments, increase the down payment, improve the credit profile driving your rate, or extend the term. Which one works depends on which ratio is binding — the result panel above tells you.