Calculate your maximum home price based on your income, monthly debts, down payment and interest rate. Understand your debt-to-income (DTI) ratio.
Lenders use your debt-to-income (DTI) ratio to determine how much you can borrow. DTI is the percentage of your gross monthly income that goes toward paying debts, including your future mortgage payment.
A common guideline is the 28/36 rule: spend no more than 28% of your gross income on housing, and no more than 36% on all debts combined. Many lenders allow up to 43% or even 50% DTI for qualified borrowers.
The biggest factor is your debt-to-income (DTI) ratio — the percentage of your gross monthly income that goes toward debts, including your future mortgage payment. Most lenders cap your total DTI at 43%, though some allow up to 50% for strong applicants.
A widely used guideline is the 28/36 rule: spend no more than 28% of your gross income on housing costs, and no more than 36% on all debts combined. This calculator applies a customizable DTI limit to estimate your maximum home price.
A: Lenders use your gross (pre-tax) annual income, plus any additional verified income like bonuses or self-employment earnings.
A: Some lenders allow DTIs up to 50%, but a lower DTI (36% or less) gives you more options and better rates.
A: 20% is ideal because it avoids PMI, but many programs accept 3% to 3.5% down for qualified buyers.