Find out what a lender will approve and what you can actually afford without stretching yourself thin — in under two minutes.
The bank says you're approved for $480,000. You should probably spend $340,000. Nobody tells you that second number — you find it the hard way, two years in, when the PITI is eating every raise and there's nothing left for the roof that just started leaking. That gap between max approval and what you can actually live with runs $80,000–$150,000 for most buyers. This calculator shows both figures at once: the ceiling the bank will draw based on your income and debts, and the comfortable price that keeps housing at a sustainable share of take-home pay.
You enter your annual gross income, monthly debt obligations like car payments and student loans, the down payment you have saved, the current mortgage rate, and your loan term. The tool calculates PITI at the comfortable price, your debt-to-income ratio, and the ceiling the bank will draw at a 28% housing ratio. The gap between those two outputs is the decision you actually have to make.
What the 28% housing ratio means for your budget
The tool anchors its comfortable price calculation on the standard guideline that housing costs — principal, interest, taxes, and insurance combined — should not exceed 28% of gross monthly income. On a $90,000 annual income that is $2,100 a month. Sounds simple, but the number shifts fast once you add property taxes and insurance back in. A $300,000 home at 7% for 30 years carries principal and interest of about $2,000 a month before a dollar of taxes or insurance.
That is why the PITI output matters more than the loan payment alone. A buyer stretching to a $320,000 home in a high-tax county can end up $400–500 above a comfortable PITI even at the same loan amount. The calculator handles this transparently: enter your expected property tax rate and annual insurance, and it builds a full monthly figure rather than letting you anchor on the loan payment and fill in the rest with optimism.
How your existing debts reshape the ceiling
Monthly Debts — car loans, student loans, credit card minimums — are the variable most buyers underweight. Lenders typically allow a total back-end DTI of 43–45%, meaning your new mortgage PITI plus all existing monthly debt payments must fit within that percentage of gross monthly income. If you have $600 a month in car and student loan payments on a $7,500 gross income, you are already at 8% DTI before you borrow a dollar for a house. That $600 alone cuts the maximum loan by roughly $75,000–$90,000 compared to a buyer with no debts and the same income.
The tool shows you the DTI calculation so you can see exactly which debts are doing the most damage. Sometimes it is more effective to pay off a $180-a-month car loan before applying than to save another $5,000 toward the down payment. The numbers will tell you which move matters more in your specific situation.
Down payment: how much actually changes your monthly cost
Every extra dollar in down payment does two things: it lowers the loan principal and, past the 20% threshold, it eliminates private mortgage insurance. PMI typically runs 0.5–1.5% of the loan annually — on a $280,000 loan that is $1,400–$4,200 a year, or $117–$350 a month added to your PITI. The calculator accounts for this by treating a sub-20% down payment as a signal that PMI should be factored into affordability guidance.
The down payment field also interacts directly with your bank approval number. A larger down payment lowers the loan-to-value ratio, which can open better rate tiers with some lenders. If you are sitting at 19% down, the math on whether to wait and save that last percentage point is worth running before you start making offers.
Loan term choice and its real cost
A 15-year mortgage at the same rate as a 30-year costs significantly more each month but far less over time. On a $300,000 loan at 7%, the 30-year payment is roughly $2,000 in principal and interest; the 15-year is about $2,700. The 30-year buyer pays roughly $420,000 in total interest over the life of the loan; the 15-year buyer pays around $180,000. That $240,000 difference is real money even accounting for inflation.
The Loan Term input lets you toggle between the two and see how the monthly PITI shifts. Many buyers default to 30 years for affordability reasons, which is a legitimate choice — but knowing the interest cost difference is useful before you commit. Some operators buying investment property intentionally choose 30 years to keep monthly costs low and cash flow positive, while buyers of a primary residence often benefit from modeling both.
When the comfortable price and max approval diverge sharply
The most useful output this tool produces is the gap between the recommended comfortable price and the max the bank will approve. In hot markets, those two numbers can be $80,000–$150,000 apart. A buyer approved for $480,000 who has a comfortable price of $340,000 faces a real decision about how aggressively to bid.
The calculator does not tell you which to choose — that depends on your income trajectory, savings cushion, and risk tolerance. What it does is make the trade-off explicit in dollar terms. Buying at max approval on a dual income with one partner planning to leave work in two years is a very different risk profile than buying at max on a single stable salary with three years of reserves. Run both scenarios before walking into a listing.
How to use it
- Enter Annual Gross Income (before taxes) — use combined household income if buying jointly.
- Enter Monthly Debts — include all minimum payments: car, student loans, credit card minimums.
- Enter Down Payment Saved — the cash you have available today, not a target.
- Set Mortgage Rate (%) and Loan Term (years) to match current market rates or what you have been quoted.
- Read the Recommended (Comfortable) Price, the Max the Bank Will Approve, and the PITI at comfortable price — then compare the gap.
Who it's for
- First-time buyer reality-checking their price range — A buyer earning $75,000 with $1,100 in monthly debts and $45,000 saved enters their numbers and discovers their comfortable price is $280,000, while their bank will approve up to $360,000 — useful context before touring $350,000 listings.
- Dual-income couple planning a timeline — A couple with $130,000 combined income and $18,000 saved runs the calculator to see how their comfortable price jumps from $310,000 to $395,000 if they hit $40,000 saved in 18 months — giving them a concrete savings target.
- Buyer deciding whether to pay off debt first — An owner-to-be with a $450/month car payment models what removing that debt does to max approval — sees it adds roughly $55,000 in purchasing power and decides whether paying it off is worth delaying the purchase.
- Self-employed buyer stress-testing different income figures — A freelancer whose gross income varies between $80,000 and $110,000 runs the calculator at both figures to see the floor and ceiling of their comfortable range before approaching a lender.
Key terms
- PITI
- The full monthly housing payment: Principal, Interest, Taxes, and Insurance. The number to use when comparing what you can afford — not just the loan payment.
- Debt-to-Income ratio (DTI)
- Total monthly debt obligations divided by gross monthly income, expressed as a percentage. Lenders use this to determine how much of your income is already committed before adding a mortgage.
- Comfortable price
- The purchase price at which your total PITI stays within 28% of gross monthly income — the standard guideline for a payment you can sustain without financial stress.
- Private Mortgage Insurance (PMI)
- A monthly premium required on most conventional loans when the down payment is less than 20% of the purchase price. Typically 0.5–1.5% of the loan annually until sufficient equity is reached.
Frequently asked questions
What is included in PITI and why does it matter?
PITI stands for principal, interest, taxes, and insurance — the four components of a true monthly housing payment. The calculator uses this full figure because focusing on the loan payment alone understates your actual monthly obligation by $300–700 depending on your location and coverage level. Running the real PITI prevents the surprise that comes when first-time buyers realize their budgeted payment was just the mortgage line.
Should I enter gross or net income?
Enter Annual Gross Income (before taxes) — that is what lenders use to calculate DTI, and it is the field the calculator is built around. Your net take-home affects what feels comfortable day to day, but the bank qualification math always runs on gross.
What DTI ratio will most lenders approve?
Most conventional lenders target a total DTI (all debts plus housing) under 43–45%. FHA loans can go to 50% with compensating factors. The calculator shows you the DTI at the comfortable price so you can see how much headroom you have before lender limits come into play.
How does this differ from a mortgage payment calculator?
A mortgage calculator takes a loan amount and gives you a payment. This tool works the other direction — it starts with your income and debts and tells you what purchase price produces a payment that fits within standard affordability guidelines. It is designed for buyers in the planning stage, not buyers who have already picked a house.
What if my property taxes are much higher or lower than average?
The tool includes a property tax rate field so you can enter your specific county or state rate rather than relying on a national average. High-tax states like New Jersey or Illinois can add $700–1,200 a month to PITI on a mid-priced home, which meaningfully lowers the affordable purchase price compared to low-tax states. Run your real numbers now, see both the comfortable price and the bank ceiling, and go into your first showing with a range you actually trust — free, no signup needed.