How much house can I afford?

Not just a number — an honest one. This shows the price a prudent guideline supports, right beside what a lender may actually approve, so you can see the gap between "comfortable" and "the most they'll let you borrow."

By the SterlingCat editorial team · Last updated 2026-07-20 · DTI limits sourced to the Fannie Mae Selling Guide (how we calculate)

The key points

The 28/36 rule is a prudent guideline, not a law: housing under 28% of gross income, all debt under 36%.
Lenders commonly approve more — up to about 45% total debt-to-income on conventional loans (Fannie Mae) with strong credit and reserves.
The most you can borrow isn't the most you should. The guideline number leaves room for everything a mortgage payment doesn't cover.

Decision guideHow Much House Can You Afford? The Guideline Number and the Lender's Maximum

Your details

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About you

What does your household earn?

Everyone who'll be on the loan, before taxes.

Any other monthly debt payments?

Car, student loans, credit-card minimums, child support.

$ a month

Your cash

How much have you saved to put down?

Cash you can put toward the purchase up front.

The loan

What interest rate are you expecting?

A rough guess is fine — a lender or rate site has today's.

How long a mortgage?

Taxes, insurance & HOA We'll use typical figures — adjust if you know them.

Property tax

% a year

Home insurance

HOA dues

On the 28/36 guideline

—

Prudent guideline —

A lender may approve up to — ~45% DTI · Fannie Mae

That's a ceiling, not a target — a comfortable budget usually sits below it, leaving room for savings, maintenance, and the rest of life.

Your monthly payment at the guideline price

Principal & interest: —
Property tax: —
Insurance: —
HOA: —
PMI (under 20% down): —
Total housing: —
Loan amount: —

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How we calculate this

Lenders cap two ratios of your gross monthly income: housing (the front-end ratio) and all debt (the back-end ratio). Your affordable housing payment is the smaller of the two limits — the binding one. From that payment we work backwards to a price:

The payment must cover principal & interest, property tax, insurance, HOA, and PMI (if you put less than 20% down).
Every one of those costs is proportional to the price (or fixed), so the price solves in one step — no guessing or iterating.

We default to the conservative 28/36 guideline and show, beside it, the price at a 45% back-end ratio — the level a lender may approve on a conventional loan with compensating factors. Both ratios are yours to change.

Where the numbers come from

The lender-max figures are quoted from the Fannie Mae Selling Guide (B3-6-02): a 36% base for manually underwritten loans, up to 45% with credit-score and reserve requirements, and up to 50% through Desktop Underwriter. The 28/36 defaults are our conservative choice, not a Fannie Mae figure — only the 36/45/50 lender limits are quoted from the guide. We avoid the "43% qualified-mortgage" figure some tools cite, as its regulatory treatment has changed and varies by program.

What's included, and what isn't

Included: the front/back DTI solve; P&I, property tax, insurance, HOA, and PMI (estimated at 0.5% of the loan per year while you're under 20% down) in the payment; the binding-constraint check.

Declared omissions (so the tool's claims stay honest): closing costs and cash-to-close (a separate limit from DTI); income adjustments (bonus/variable income haircuts, self-employment averaging, rental offsets — a single gross figure here); program-specific rules (FHA MIP, VA funding fee and residual-income test, USDA); reserves, credit-score-based pricing, and PMI cancellation timing. This is the conventional-loan guideline — other programs are named, not modelled.

Terms, in plain words

Front-end ratio: The share of your gross monthly income a lender lets go to housing (principal, interest, taxes, insurance, HOA). The "28" of the 28/36 rule.
Back-end ratio (DTI): The share of gross income that can go to all debt — housing plus car, student, and card payments. The "36", and where lenders flex up to ~45%.
Binding constraint: Whichever ratio runs out first sets your limit. With little other debt, the housing ratio binds; with a lot, the total-debt ratio does.
PMI: Private mortgage insurance — an extra monthly charge when your down payment is under 20%, which lowers how much house the same payment buys.

A sensible next step

A lender's pre-approval tells you the ceiling; this tells you the comfortable floor-to-ceiling range. Aim below the max, and pressure-test it with a higher rate — the payment, not the price, is what you live with.

Common questions

Why is your number lower than my pre-approval?

A pre-approval usually reflects the lender's maximum — often a 43–50% DTI. Our default is the prudent 28/36 guideline, which leaves room for saving, maintenance, and the costs a mortgage payment doesn't include. Raise the ratios to match your lender and the numbers converge.

Does a bigger down payment let me afford more?

Yes, two ways: it's price you don't finance, and above 20% it drops PMI — so the same monthly payment buys more house. Try it and watch the max move.

What's not in this?

Closing costs and cash-to-close (a separate hurdle from DTI), and program-specific rules for FHA/VA/USDA loans. It models the conventional-loan guideline; see "How we calculate this" for the full list.

Sources

Grounded in authoritative primary sources:

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