Our site offers a pair of house‑affordability tools that help you gauge how much you could realistically spend on a home, using either your household’s income‑to‑debt profile or a set monthly budget. These calculators are geared toward users residing in the United States.
This is a separate calculator used to estimate house affordability based on monthly allocations of a fixed amount for housing costs.
U.S. lenders—including conventional, FHA and other mortgage providers—typically rely on two metrics, known as the front‑end and back‑end ratios, to decide the loan amount they’re willing to extend. These are essentially debt‑to‑income (DTI) ratios with slight variations, explained below. For deeper details or to run your own DTI calculations, visit the Debt-to-Income (DTI) Ratio Calculator.
Since lenders use DTI to gauge borrowing risk, prospective buyers can improve their chances of securing a loan—ideally on favorable terms—by reducing their DTI. A lower ratio generally translates into better loan offers.
The front-end debt ratio is also known as the mortgage-to-income ratio and is computed by dividing total monthly housing costs by monthly gross income.
| Front-end debt ratio | = |
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× 100% |
In our tool, only conventional and FHA mortgages factor in the front‑end debt ratio. The monthly housing expense accounts for not just loan interest and principal, but also insurance, property taxes and any HOA or co‑op fees.
The back-end debt ratio includes everything in the front-end ratio dealing with housing costs, along with any accrued recurring monthly debt like car loans, student loans, and credit cards.
| Back-end debt ratio | = |
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× 100% |
This ratio is known as the debt-to-income ratio and is used for all the calculations of this calculator.
A conventional loan in the United States refers to a mortgage that isn’t directly backed by the federal government and generally follows the standards set by government‑sponsored enterprises such as Fannie Mae or Freddie Mac. These loans may be classified as conforming—purchased by the agencies and adhering to their guidelines—or non‑conforming, which are not bought by the agencies yet still fall under the conventional category.
The 28/36 rule is a widely accepted benchmark in the U.S. and Canada for evaluating a household’s risk profile for conventional mortgages. It advises that no more than 28 % of gross monthly income should go toward housing costs (front‑end) and no more than 36 % toward total debt obligations (back‑end). This guideline serves as a qualification threshold for conforming conventional loans.
Although the 28/36 rule is one of the most common methods for assessing borrower risk—highlighted by Robert Shiller in his acclaimed book *Irrational Exuberance*—lenders under pressure in competitive markets sometimes overlook it. Because enforcement can be lax, some lenders may extend credit to borrowers who technically fail the rule.
Please visit our FHA Loan Calculator to get more in-depth information regarding FHA loans, or to calculate estimated monthly payments on FHA loans.
An FHA loan is a mortgage insured by the Federal Housing Administration. Borrowers are required to pay mortgage insurance premiums, which shield lenders from losses when borrowers default. This insurance enables lenders to offer FHA financing at lower interest rates and with more flexible criteria, such as a reduced down‑payment percentage.
To qualify for an FHA loan, applicants must keep their front‑end ratio below 31 % and their combined front‑ and back‑end ratio below 43 % of gross monthly income. Additionally, FHA loans carry an upfront premium of 1.75 %.
FHA loans relax DTI limits compared with conventional financing, allowing up to 3 % higher front‑end and 7 % higher back‑end ratios. This added leeway is offset by the requirement that borrowers pay an upfront mortgage‑insurance premium.
Please visit our VA Mortgage Calculator to get more in-depth information regarding VA loans, or to calculate estimated monthly payments on VA mortgages.
A VA loan is a mortgage loan granted to veterans, service members on active duty, members of the national guard, reservists, or surviving spouses, and is guaranteed by the U.S. Department of Veterans Affairs (VA).
To qualify for a VA mortgage, the applicant’s combined‑payment‑to‑income ratio must stay below 41 %. In practice this means that the total of monthly housing expenses plus all other recurring debts cannot be more than 41 % of gross earnings. VA loans typically ignore the front‑end ratio but do require a funding fee.
The tool lets users pick a debt‑to‑income percentage ranging from 10 % up to 50 %, stepping by 5 %. When the down payment is under 20 %, an extra 0.5 % for PMI is automatically folded into the monthly housing cost, reflecting the treatment of conventional loans. Options beyond 50 % are omitted because they would push the DTI past the risk ceiling used by most lenders.
Generally, prospective buyers should select smaller DTI figures for a cautious outlook and larger ones when they’re willing to assume more risk. A 20 % ratio is far more manageable during tight financial spells than a 45 % ratio. Those uncertain which path to follow might start with the Conventional Loan scenario, which applies the 28/36 guideline.
If you cannot immediately afford the house you want, below are some steps that can be taken to increase house affordability, albeit with time and due diligence.