See exactly how much house you can afford based on your income, existing debts, and down payment — using the same 28/36 DTI rules lenders use.
Lenders cap your housing payment using the 28/36 rule: housing costs (principal, interest, taxes, insurance, HOA — called PITIA) should not exceed 28% of gross monthly income, and total debt payments (housing + existing debts) should not exceed 36%. This calculator finds the maximum home price where both limits hold at once.
Max housing payment = min(28% of monthly income, 36% of monthly income − existing debts)
The loan amount is then solved so that the P&I portion, plus 1/12 of annual taxes and insurance, plus HOA, equals that housing payment cap.
On $95,000/year income ($7,917/month) with $450 in existing debts: 28% cap = $2,217/month. 36% cap minus debts = $2,850 - $450 = $2,400/month. The lower of the two, $2,217, becomes the housing budget. After deducting property tax (1.10% of price / 12), insurance ($150/mo) and HOA, the remaining amount supports a loan of roughly $273,000 at 6.8% over 30 years — plus the $40,000 down payment, a maximum home price near $313,000.
Some conventional lenders allow up to 43-45% total DTI, and certain loan programs go higher. This calculator uses the standard 28/36 guideline most lenders quote first — treat the result as a conservative, sustainable baseline rather than the absolute ceiling a lender might approve.
Once you know your target price, use the Mortgage Calculator for exact payment detail, the PMI Calculator if putting down less than 20%, or the Closing Cost Calculator to budget cash needed at closing.