How Much House Can I Afford

“How much house can I afford?” and “How much will a lender approve?” sound alike. They are not the same question. Affordability is a planning estimate from income, debts, down payment, and housing costs. Approval is an underwriting decision. Start with the mortgage affordability calculator, then treat the result as a ceiling to poke at — not an offer letter.

Walk through an $8,000 monthly income

Gross monthly income of $8,000 and a 28% housing assumption leaves $2,240 for housing before other debts. If car and student-loan minimums already take $800, a 36% total-debt cap is $2,880 — so only $2,080 is left for housing. The back-end limit binds first. Raising the ratio sliders in a calculator does not make a lender accept those ratios; it only shows how sensitive the estimate is.

After you have a price range, run the mortgage calculator with taxes, insurance, and PMI at a quoted note rate (example rates only — not a forecast). Ask whether that payment still leaves room for maintenance, furnishings, and an emergency reserve.

Why the tool uses 28% and 36%

Those figures are editable planning defaults, not universal lender limits. Conventional, FHA, VA, and other programs use different debt-to-income (DTI) frameworks, and lenders add overlays. The Consumer Financial Protection Bureau treats DTI as one underwriting factor among several — not a single pass/fail number for every mortgage.

Estimated housing costs in the tool may include principal and interest, property taxes, homeowners insurance, applicable estimated PMI, and HOA fees. If implied LTV is above 80%, estimated PMI is subtracted from the housing budget so the affordable price is not inflated. More on that in what PMI is and how it works.

What the estimate skips

• Credit score, employment history, and how long assets have been seasoned.
• Appraisal, title, and condo-project eligibility.
• Closing costs — those are not the same as the down payment.
• Future tax or insurance increases.

If the payment only works on a 30-year term and you were hoping for 15 years, read 15-year vs 30-year mortgage differences before stretching the price.