How much house fits your monthly housing budget?
Subtract property costs from your housing budget, convert the remaining principal-and-interest allowance into a loan, then add your down payment. Change the inputs to estimate your own price ceiling.
Income, down payment and loan
Monthly property costs and budget assumptions
The sample costs below are illustrations, not local averages or quotes. Enter annual tax and insurance estimates divided by 12. Include flood or other required property insurance and assessments. Update the estimates for the property and loan you are considering.
Estimated Home-Price Ceiling
$300,500.46
Entered gross-income ratios and fixed monthly costs define this scenario; not loan approval. Closing costs and living expenses excluded. Zero mortgage insurance means excluded, not waived.
Estimated Loan Ceiling
$250,500.46
Monthly Housing Budget
$1,983.33
Principal + Interest Budget
$1,583.33
Included Property Costs
$400.00
Monthly Housing Budget Breakdown
How this estimate works
Monthly housing budget = the smaller of gross monthly income × housing ratio, or gross monthly income × total-debt ratio minus other monthly debts. Principal-and-interest budget = housing budget minus entered property costs. A fixed-rate, fully amortizing loan uses monthly payments; fractional years must represent whole months (1.5 years = 18 months).
The editable 28%/36% defaults are planning assumptions, not universal lender limits. Costs stay fixed in this scenario; taxes are not inferred from price, and mortgage insurance is not inferred from down payment. A zero mortgage-insurance entry means excluded, not waived. No approval, credit, loan-to-value or loan-program eligibility is determined. Closing costs, reserves, maintenance, utilities, taxes on income and other living costs are not included.
What the price estimate means
This is a ceiling under your selected ratios and property-cost estimates, not a spending target. Check it against take-home pay, savings goals and actual ownership costs. Obtain property-specific tax, insurance and mortgage-insurance estimates, then recalculate.
Worked example: $85,000 income and $50,000 down
Illustration: $85,000 gross annual income; $500 other monthly debts; $50,000 down payment; 6.5% fixed rate; 30 years; 28% housing and 36% total-debt ratios. Monthly costs: $250 tax + $100 property insurance + $50 HOA + $0 mortgage insurance. Zero mortgage insurance is an illustrative exclusion, not an eligibility finding.
- Gross income is $7,083.33/month. The housing ratio permits $1,983.33; the total-debt ratio leaves $2,050.00 after other debt. Use the lower $1,983.33 housing budget.
- Reserve $400.00 for property costs, leaving $1,583.33 for principal and interest. This supports a $250,500.46 loan; adding $50,000 gives a $300,500.46 estimated home-price ceiling. Totals use unrounded calculations.
- Leaving those $400.00 costs out gives $363,784.79, an overstatement of $63,284.33 for this scenario. Add any mortgage-insurance quote before relying on a low-down-payment scenario.
House-affordability questions
Why didn’t paying off debt increase my estimated home price?
The model uses the smaller of the housing-ratio allowance and the total-debt allowance after other required monthly debt payments. With the other inputs unchanged, reducing those payments raises the estimate only while the total-debt allowance is tighter and there is room for principal and interest after property costs. Once the housing-ratio allowance is tighter, further debt reductions leave the estimate unchanged. Paying down a balance need not reduce the required payment; confirm that payment before updating it. If payoff uses savings set aside for the down payment, update the down payment too. This is a model result, not loan approval. See the mortgage affordability guide.
Should I use gross income or take-home pay?
Enter annual income before taxes and deductions. Then compare the modeled monthly housing budget with take-home pay, living expenses and savings goals. Gross-income ratios do not replace your household budget.
Are closing costs part of the down payment input?
No. Enter only the cash you plan to put toward the purchase price. Keep closing costs, moving costs and reserves separate; the calculator does not deduct them from your savings.
Is the 28/36 rule a lender requirement?
No. These are editable budget defaults here. Products and lenders use different limits and assess other factors. A result does not mean a lender will approve a loan.
What belongs in other monthly debts?
Enter recurring debt payments such as auto loans, student loans, credit-card minimums and other obligations that continue after purchase. Do not count the modeled new housing payment again. Rent that ends when you move is not the new mortgage.
Why enter mortgage insurance separately?
Cost and applicability depend on the loan. Enter a lender estimate; zero excludes it from the model and does not establish that you can avoid it.
What if no mortgage budget remains?
The page shows no supported financed home price under these assumptions. A down payment alone does not establish affordability. Review debt payments, ratios and property costs; cash purchases need a separate ongoing-cost budget.
Sources and modeling notes
Check a specific home next
Compare its payment and down payment with these estimates, then check your personal monthly budget. These tools are scenarios, not approval decisions.
