House Affordability Calculator — How Much Can I Afford?

This is a traditional lender guideline stating that your housing payment should not exceed 28% of gross monthly income (front-end ratio), and all debt payments combined should not exceed 36% of gross income (back-end ratio). While government-backed loans like FHA may allow up to 43% DTI, following the 28/36 rule provides a financial cushion and significantly reduces the risk of becoming "house-poor" — where most of your income goes to housing costs with little left for savings, emergencies, and other goals.

Yes, this calculator reserves approximately 20% of the maximum housing budget for property taxes and homeowners insurance. However, actual property tax rates vary significantly by location — from under 0.5% of home value annually in some areas to over 2.5% in others. For a more precise estimate, look up your local county property tax rate and get insurance quotes for the specific property.

Private Mortgage Insurance protects the lender (not you) when your down payment is less than 20% of the purchase price. It typically costs 0.5-1.5% of the loan amount per year, adding $50-$200 or more to your monthly payment. You can avoid PMIInsurance required by lenders when the down payment is less than 20% of the home price. Protects the lender, not the borrower. by saving a 20% down payment, using a conventional loan with a "piggyback" second mortgage (80/10/10 structure), or using certain loan programs like VA loans which do not require PMIInsurance required by lenders when the down payment is less than 20% of the home price. Protects the lender, not the borrower..

Not necessarily. The calculator shows the maximum loan amount the bank would approve, not what is most comfortable for your lifestyle. Lenders may approve you at 43% DTI, but many financial advisors suggest targeting 28-33% to maintain flexibility for retirement savings, emergencies, travel, and other life goals. Consider your full financial picture, not just the approval maximum.

The traditional recommendation is 20% to avoid PMIInsurance required by lenders when the down payment is less than 20% of the home price. Protects the lender, not the borrower., but many buyers put down less. FHA loans allow as little as 3.5% down, and conventional loans may allow 3-5% for qualified buyers. A larger down payment means lower monthly payments, less total interest, and no PMIInsurance required by lenders when the down payment is less than 20% of the home price. Protects the lender, not the borrower.. However, it is also important to keep an emergency fund after closing — depleting all savings for a down payment can be risky.