How to use this calculator
Enter your gross annual household income, your fixed monthly debt payments (car, student loans, minimum credit-card), your planned down payment, and current rates. The calculator applies the lender 28/36 rule:
- 28% front-end: Total housing cost should not exceed 28% of gross monthly income.
- 36% back-end: Total housing cost plus monthly debts should not exceed 36% of gross monthly income.
Whichever ratio is tighter wins. The result is your maximum sustainable home price - the upper edge of what you can afford without stretching.
Frequently asked questions
Why is this number lower than what my lender pre-approved?
Lenders often pre-approve to 43% DTI or higher. The 28/36 rule is a conservative benchmark for what’s comfortable, not what’s maximum. If you live to your pre-approval ceiling, you’ll likely feel house-poor - no buffer for car repairs, vacations, or rate increases. The rule of thumb: borrow at the lender’s number, live at the calculator’s number.
What counts as monthly debt?
Anything that shows on your credit report and has a minimum monthly payment: auto loans, student loans (even if currently deferred), personal loans, and the minimum payment on credit-card balances. Utilities, groceries, gym memberships, streaming, and childcare don’t count for this calculation, but you should still budget around them.
Does this account for property taxes and insurance?
Yes. The calculator estimates tax + insurance at 2.5% of home price annually (a conservative East Texas average) and works backward from your maximum housing cost to find a home price that fits.
Should I include my spouse’s income?
Include the income of anyone who will be on the loan. If only one spouse is on the loan, only that spouse’s income counts, but both spouses’ debts often still apply (especially in a community-property state like Texas). Talk to your loan officer about the cleanest structure.
What if I have a low credit score?
Credit score doesn’t change the affordability ratios, but it does change your interest rate, which changes how much house your max payment buys. A 100-point score difference can mean 0.75% in rate, which is roughly 8% less house. If your score is below 680, working on it for six months before buying is often worth more than buying now.