HomeDealMath

Home Affordability Calculator

How much house can you actually afford? Front-end + back-end DTI ratios with real lender thresholds.

Inputs

Income & Debt

Loan

Carrying Costs

DTI Ratios

Results

Maximum Home Price
$291,765
Max Loan Amount
$251,765
Down Payment
$40,000
Max Housing Payment
$2,217
Binding Constraint
front-end
Front-End @ 28%$2,217
Back-End @ 43%$2,954
Monthly Tax + Ins + HOA + PMI$542

Sam's Take

Lenders care about back-end DTI more than front-end in 2026. Most underwriting allows 43%, and FHA goes to 50% with compensating factors. Just because you can borrow that much doesn't mean you should. My personal rule: cap housing at 25% of gross income for a primary residence, even if the lender approves more. The extra 5-10% is the difference between affording vs scrambling. Especially important for first-time buyers — surprise repairs, lifestyle creep, and rate increases on ARMs are the three things that turn 'comfortably affording' into 'house poor.'

Related Calculators

MortgageFHA LoanRent vs Buy

"How much house can I afford?" — what the bank means vs what you can live with

When the bank tells you what you can afford, they're running two simple ratios called DTI (debt-to-income). They want to know what percentage of your gross monthly income goes to housing, and what percentage goes to all your debt combined. Two numbers, two ceilings, that's it.

  • Front-end DTI is just the housing payment (PITI + HOA + PMI) divided by your gross monthly income. The conventional cap is 28%. So if you make $10,000/month gross, the bank wants your housing under $2,800.
  • Back-end DTI is everything — housing plus the car loan plus student loans plus credit card minimums plus alimony — divided by gross monthly income. The conventional cap is 36%. FHA stretches to 43%. Some loans go to 50% with strong credit and reserves.

Whichever ratio runs out of room first is your "binding constraint" — the one actually limiting how much house you can buy. The calculator shows both numbers and tells you which one is binding for you.

What the bank approves vs what you should actually borrow

Here's the thing nobody tells first-time buyers: the bank's approval is a ceiling, not a target. They're modeling debt repayment math. They are not modeling a kid showing up, daycare at $2K/month, your car needing a transmission, a job loss, lifestyle creep, or what your ARM rate looks like in year 6.

After 15+ years owning a home and 200+ rentals, my personal rule is to cap housing at 25% of gross income for a primary residence, even if the lender approves more. That extra 3-15% the bank is willing to give you is debt the bank wants you to take on, not affordability you should accept. The buyers I've watched scramble are almost always the ones who borrowed at the bank's max instead of their own.

Three things that turn "comfortable" into "house poor"

  • Surprise repairs. Owning a home means a $4,000 furnace can show up next February. If your monthly margin is $200 you can't absorb it without going into debt.
  • Lifestyle creep. The $4,500/month payment that felt fine in year 1 feels brutal in year 3 once you have a kid in daycare and a car payment you didn't have before.
  • ARM rate adjustments. If you took an adjustable-rate mortgage, that lower initial rate goes away after 5 or 7 years and the new payment can land 30-40% higher than what you started at.

Don't borrow what the bank says you can. Borrow what you can still afford on a bad year.