Home Affordability Calculator

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Student debt affecting your home budget?

Lower your rate to improve affordability

Reducing your student loan payment with ELFI lowers your DTI ratio, potentially qualifying you for a larger mortgage.

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Tips

📏Most lenders use 28/36: housing ≤28% of gross income, total debt ≤36%.
💳Paying down existing debt increases how much house you can afford.
🏦Getting pre-approved tells you your actual limit, which may differ from this estimate.

How much house can you actually afford?

The mortgage industry uses specific debt ratios to determine how much they will lend you — but the amount a lender will approve is often more than is actually comfortable to spend. Being approved for a $500,000 mortgage does not mean buying a $500,000 home is a good idea. This calculator gives you the lender's maximum, but your personal maximum should account for your full financial picture: retirement savings, emergency fund, lifestyle goals, and the hidden costs of homeownership.

The standard lender guidelines are the 28/36 rule: your housing costs (principal, interest, taxes, insurance — PITI) should not exceed 28% of gross monthly income, and your total debt payments (housing plus all other debts) should not exceed 36% of gross monthly income. Some lenders now allow DTI ratios up to 43% or even 50% for well-qualified borrowers, but higher DTI means less financial margin for error.

The 28/36 rule explained with examples

Example: Single earner, $90,000/year ($7,500/month gross)

Max housing (28%): $2,100/month for PITI. Max total debt (36%): $2,700/month. If you have $600/month in car and student loan payments, max housing drops to $2,100 (total debt limit: $2,700 - $600 = $2,100, which happens to match the housing limit in this case). At 7% interest, $2,100/month in P&I supports roughly a $315,000 loan. With a 10% down payment, that is a $350,000 purchase price.

Example: Dual-income couple, $140,000/year combined ($11,667/month gross)

Max housing (28%): $3,267/month. With $800/month in existing debts, total debt limit is $4,200, so max housing is $3,267. At 7% for 30 years, $3,267/month P&I supports roughly a $490,000 loan. With 20% down, that is a $612,000 purchase price — and eliminates PMI.

The hidden costs that most buyers forget to budget

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Maintenance and repairs (1–2% of home value/year)
A $400,000 home requires $4,000–$8,000/year in average maintenance. This is not optional — deferred maintenance becomes expensive emergency repairs. Budget $333–$667/month in your mental housing cost, even if it does not show in your monthly payment.
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Property taxes
In many markets, property taxes add 25–40% to the base mortgage payment. In New Jersey, Illinois, or Texas, property taxes on a $400,000 home can be $8,000–$12,000/year ($667–$1,000/month). Research local rates before falling in love with a property.
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Moving and setup costs
Moving professionally typically costs $1,500–$5,000 locally, more for long-distance. New homes need furniture, window treatments, appliances, and yard equipment. Budget $5,000–$20,000 for first-year setup costs beyond the down payment and closing costs.
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HOA fees
If the property has a homeowners association, fees can range from $50/month (basic community) to $1,000+/month (luxury condos, gated communities). Include HOA fees in your housing cost calculation — they are fixed, unavoidable obligations.
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Closing costs
Typically 2–5% of purchase price for the buyer — on a $400,000 home, that is $8,000–$20,000 due at closing, on top of the down payment. These include lender fees, title insurance, escrow, appraisal, and prepaid taxes and insurance.

Frequently asked questions

20% eliminates PMI and reduces your loan size, but it is not always the right choice. Tying up savings in a down payment reduces your liquidity and emergency fund. At low mortgage rates, some financial advisors argue that a smaller down payment preserving cash for investing makes sense. At today's higher rates, reducing the loan size through a larger down payment often wins the math.

DTI = total monthly debt payments ÷ gross monthly income. Lenders calculate two versions: front-end DTI (only housing costs ÷ income) and back-end DTI (all debt payments ÷ income). The 28/36 rule refers to front-end and back-end limits respectively. Most conventional loans require back-end DTI below 43%.

Lenders look at the ratio of income to debt payment, not absolute income. There is no minimum income for a mortgage, but most programs have minimum loan amounts that set a practical floor. The bigger constraint is the down payment and closing costs, which require liquid savings that most low-income buyers struggle to accumulate.

Student loans are included in the back-end DTI calculation. High student loan payments directly reduce how much mortgage you can take on. Income-driven repayment plans can lower your monthly payment for DTI purposes but may extend the repayment timeline. Some lenders use 1% of the student loan balance as a monthly payment for DTI calculation if you are on IDR.

A jumbo loan is a mortgage that exceeds the conforming loan limit — $766,550 in most US counties in 2024, higher in expensive markets. Jumbo loans are not backed by Fannie Mae or Freddie Mac, so they typically require higher credit scores, larger down payments (10–20%), and have slightly higher interest rates.