Start from your income and debts, the way a lender does, and see the price range they point to.
How it works
Most housing payment = income × debt-to-income limit − other debts
From that payment, taxes, insurance and HOA dues come off first; what is left supports principal and interest. The calculator converts that into a loan amount at your rate and term, then adds your down payment to reach a price. The table repeats the sum at 36%, 43% and 50% of income, so you can see a comfortable figure next to the most a lender might allow.
Keep in mind
- The limits shown are common guideline figures: about 45% for conventional, 43% for FHA, 41% for VA (which also checks residual income) and 41% for USDA (which also caps the housing payment at 29%). Automated underwriting can approve higher ratios with strong credit, savings or other compensating factors.
- Mortgage insurance is not included here; on a low down payment it reduces the price a little.
Questions
What income do I need for a $400,000 mortgage?
Add the full housing payment (principal, interest, taxes, insurance and dues) to your other monthly debts, then divide by the lender’s debt-to-income limit, such as 45% for many conventional loans. The result is the gross monthly income needed. Enter your rate above and leave income blank: the table shows the income needed for every loan amount from $200,000 to $1,000,000.
How much house can I afford on $100,000 a year?
That is about $8,333 a month before taxes. At a 45% debt-to-income limit, up to 45% of that can go to the new housing payment and other debts combined, taxes and insurance included. Enter your own rate, debts and costs above for a real figure.
Do lenders use gross or take-home pay?
Gross pay, before taxes and deductions. For self-employed borrowers it is qualifying income after business expenses, which can be quite different from deposits.
Related guides
- First-time buyers
- Conventional loans
- FHA loans
- USDA loans
- Jumbo vs conforming loans
- Pre-qualification vs pre-approval
