How it works
Choose your own housing-to-income and total debt-to-income targets. The lower limit determines the modeled housing budget. Deduct monthly taxes, insurance and housing fees to find the amount available for principal and interest, then convert that payment to a loan balance and add your down payment.
Formula
Monthly housing budget = max(0, min(I × Housing-to-income target ÷ 100, I × Total debt-to-income target ÷ 100 − Other monthly debt payments)); I = Gross annual income ÷ 12.
Worked example
With 90,000 gross annual income, 300 other monthly debt, targets of 28% and 36%, 400 monthly housing overhead, an 80,000 down payment and a 30-year loan at 6.5%, the estimated financed home-price budget is $348,958.39.
Assumptions and limitations
The 28% and 36% defaults are adjustable illustrations, not universal underwriting limits. Overhead is a fixed amount; it does not automatically grow with the estimated home price. The tool does not assess credit, savings reserves, closing costs, lender rules, taxes on income or other living costs. A zero result means no financed housing budget under the entered assumptions; cash-only purchases are not evaluated.
Local rates and lending rules
Enter a lender’s nominal interest rate, not APR. This model divides it by 12 and assumes monthly payments. Fees, eligibility, compounding conventions and tax rules vary by country.
Sources and methodology
- CFPB — Principal, interest and total monthly payment
- CFPB — Understanding a Loan Estimate
- CFPB — Debt-to-income ratio
- CFPB — Compare loan offers
Sources checked 2026-10-26
Frequently asked questions
Is this an amount a lender will approve?
No. Lenders assess many factors and follow jurisdiction-specific rules. Treat this as a budget scenario, and consider actual take-home pay, household expenses and an emergency reserve separately.
Amounts are illustrative. Not financial advice or a lender quote.