Lenders use debt-to-income (DTI) ratios to determine how much you can borrow. There are two key ratios: the front-end ratio (28% rule), which limits your housing expenses to 28% of your gross monthly income, and the back-end ratio (36% rule), which limits your total monthly debt payments including housing to 36% of your gross monthly income. This calculator uses both and takes the more conservative result.

Your down payment directly impacts how much house you can afford. A larger down payment reduces the loan amount needed, which means lower monthly payments and less interest paid over time. Putting down at least 20% also eliminates the need for private mortgage insurance (PMI), saving you additional money each month.

Keep in mind that the maximum price you qualify for may not be what you should spend. Financial advisors often recommend spending no more than 25% of your take-home pay on housing to leave room for savings, investments, and unexpected expenses. Use this calculator as a starting point and adjust based on your complete financial picture and personal comfort level.