Based on standard 43% DTI guidelines — get a precise number from an advisor.
How this calculator works
This tool estimates what you can qualify for using the debt-to-income guideline most lenders start with: your total monthly debt payments, including the full housing payment on the new home, shouldn’t exceed 43% of your gross monthly income. We take 43% of your monthly income, subtract your current monthly debt payments, then subtract the estimated property taxes, homeowner’s insurance, and HOA dues for the home you’re considering. Whatever is left is what’s available for principal and interest, and we solve for the loan amount your target rate and term would support at that payment.
How we estimate taxes and insurance
Property taxes are estimated at 1.25% of the purchase price per year, divided by 12. Homeowner’s insurance is estimated at 0.75% per year of the amount you’d be financing (purchase price minus your down payment), also divided by 12. Real rates vary by location, property, and carrier, so treat these as reasonable placeholders until you have actual quotes in hand.
What this estimate doesn’t include
This estimate doesn’t factor in your credit score, which directly affects the rate a lender will actually offer you, and it doesn’t include mortgage insurance, which typically applies when your down payment is less than 20%. Think of this as a starting point, not a pre-approval.
Next steps
Ready to get real numbers? Schedule a consultation or read more about how we help first-time home buyers. You can also check out the Rent vs. Buy Calculator if you’re still deciding whether now’s the time.