Affordability Calculator
FAQ
Your questions answered.
How much house can I afford on a $300,000 salary?
At $300,000/year gross income, the 28% DTI rule allows up to $7,000/month in total housing costs. After accounting for estimated property taxes and insurance on a home in that price range, that supports a purchase price of approximately $1,147,000 with 20% down at a 6.0% rate — assuming minimal existing debt. Add significant car loans or student loans and the ceiling drops. Use the calculator with your actual debt load for a precise figure.
What income do I need to afford a $1 million home?
With 20% down, a $1 million home requires an $800,000 loan. At 6.0%, the P&I payment is $4,796/month. Add estimated taxes and insurance and total PITI is approximately $6,296/month. To keep housing at or below 28% of gross income, you need roughly $22,500/month in gross income — or about $270,000/year. Your actual number shifts with your tax rate, HOA fees, and existing debt.
What is a jumbo loan and does it affect affordability?
A jumbo loan is any mortgage above the 2026 conforming limit of $806,500. Jumbo loans typically require higher credit scores (700–720 minimum), larger down payments (10–20%), and more stringent income documentation. They are slightly harder to qualify for, which is why many buyers targeting $1M+ homes need to be more deliberate about their debt profile and cash reserves.
Does the calculator include PMI?
Yes. If your down payment is under 20%, the calculator adds an estimated PMI cost based on approximately 0.8% of the loan amount annually. PMI disappears once your loan-to-value ratio reaches 80%, either through payments or home appreciation.
How does existing debt affect what I can borrow?
Existing monthly debt obligations — car loans, student loans, credit card minimums — count against your back-end DTI. A buyer at $400,000/year income with $2,000/month in existing debt has $10,000/month (30% back-end) already claimed before the mortgage is added. That meaningfully limits the mortgage they can qualify for at the standard 43% back-end ceiling.
How to Use This Calculator
Annual Household Income ($): Enter your total pre-tax household income. For two-income households, enter the combined amount.
Monthly Debt Payments ($): Enter your total existing monthly debt obligations — car loans, student loans, credit card minimums, and any other recurring debt. Do not include current rent; that will be replaced by your mortgage.
Recurring Monthly Expenses ($): Enter other fixed monthly expenses such as subscriptions, childcare, or regular living costs the calculator should factor into your financial picture.
Down Payment: Enter the dollar amount you plan to put down, or adjust the percentage slider. The percentage updates the dollar figure automatically based on your calculated buying power.
Interest Rate (%): Adjust to the rate you've been quoted, or use the default to model current market conditions.
Loan Term (in Years): Choose 15, 20, or 30 years. A longer term improves buying power by lowering the required monthly payment.
The calculator returns your Buying Power — the maximum home price based on your inputs — your DTI percentage, and a full monthly breakdown including estimated property tax, insurance, and PMI where applicable.
What the DTI Scale Means
The calculator shows your debt-to-income ratio on a color-coded scale.
Comfortable (≤28%) means your housing costs are well within standard lender guidelines. Most conventional lenders use 28% as the front-end DTI threshold.
Stretch (29–36%) means you are in qualifying range for most lenders but with less financial cushion. You may still get approved but with less room for unexpected expenses.
Difficult (37–43%) means you are at the upper boundary of what most conventional lenders will approve. Some lenders allow up to 43% back-end DTI for well-qualified borrowers, but approval becomes more conditional.
Understanding Your Buying Power
Your buying power is not simply a function of income — it is the highest home price where your total monthly commitments stay within an acceptable DTI range given your income, debt, and expenses.
On a $350,000 household income with $3,000 in monthly debt payments, $4,000 in recurring expenses, a 15% down payment, and a 6.75% rate on a 30-year term, the calculator produces a buying power of approximately $882,810 — at a 32% DTI. Adjusting the down payment to 20% or reducing monthly obligations will push that number higher and improve the DTI reading.
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