See how large a mortgage you can qualify for once your debts are counted. This mortgage affordability calculator with debt to income ratio limits applies the 28/36 rule to your income, debts, rate and down payment to find your maximum loan and payment.
Estimate based on the 28/36 rule. Lenders also weigh credit, employment and reserves.
How Much Does Debt Lower the Mortgage You Qualify For?
Once your monthly debts pass 8% of gross income, each extra dollar of debt cuts your maximum payment by a dollar. On an $80,000 salary that point is $533.33 a month. With $800 of debts and $400 for tax and insurance, the cap falls from $1,866.67 to $1,600, and the loan you can carry at 6.5% over 30 years drops from about $232,043 to $189,853.
| Monthly debts | Max payment | Loan at 6.5%, 30 yr |
|---|---|---|
| $0 | $1,866.67 | ≈ $232,043 |
| $300 | $1,866.67 | ≈ $232,043 |
| $800 | $1,600.00 | ≈ $189,853 |
| $1,200 | $1,200.00 | ≈ $126,569 |
Front End vs Back End DTI for a Mortgage
The front-end ratio counts only your housing payment, capped at 28% of gross monthly income; the back-end ratio adds every other debt, capped at 36%. The tool takes the lower result and works backward to a loan and price.
Formula: Max Monthly Payment = min(28% × Monthly Income, 36% × Monthly Income − Monthly Debts); Loan Amount = (Max Payment − Taxes & Insurance) × [1 − (1+r)^-n] ÷ r; Affordable Price = Loan Amount + Down Payment, where r is the monthly interest rate and n is the total number of monthly payments.
How to Work Out Your Maximum Mortgage Payment Based on Income
Your maximum mortgage payment based on income is the lower of the two caps. For $80,000 with $800 of debts:
- Divide the salary by 12: $80,000 ÷ 12 = $6,666.67 a month.
- Front-end cap: 28% × $6,666.67 = $1,866.67. Back-end cap: 36% × $6,666.67 − $800 = $1,600.
- Take the lower figure, $1,600, as your maximum payment.
- Subtract $400 for tax and insurance, leaving $1,200 for principal and interest.
- At 6.5% over 30 years, $1,200 a month supports a loan of about $189,853. Add your down payment to get the price.
- Annual household income: gross yearly income, divided by 12
- Monthly debts: card, auto and student loan payments, tested against the 36% limit
- Down payment: cash you put down, added to the loan to get the price
- Interest rate: the annual rate, divided by 12 to give r
- Tax + insurance / mo: property tax and homeowners insurance, taken off the max payment first
- Loan term: 30, 20 or 15 years, which sets n
Example Scenarios
| Annual Income | Monthly Debts | Down Payment | Rate | Term | Affordable Home Price |
|---|---|---|---|---|---|
| $60,000 | $0 | $20,000 | 6.0% | 30 yr | ~$203,000 |
| $90,000 | $300 | $40,000 | 6.5% | 30 yr | ~$309,000 |
| $120,000 | $500 | $60,000 | 7.0% | 15 yr | ~$316,000 |
| $50,000 | $600 | $10,000 | 6.0% | 30 yr | ~$118,000 |
| $75,000 | $0 | $15,000 | 5.5% | 20 yr | ~$219,000 |
These rows assume tax and insurance of $300, $400, $500, $250 and $350 a month, top to bottom.
Max Mortgage Amount Based on Income Is Not a Budget
The max mortgage amount based on income is what a lender may approve, which is not always what fits your budget. Lenders and loan programmes set their own limits.
- Include every monthly debt, including child support. Leaving one out inflates the maximum.
- Enter gross income, but budget from net pay.
Rates move the answer more than people expect. Try a rate half a point higher, and treat the result as a starting point for a lender conversation, not a pre-approval. The debt-to-income ratio explainer on Wikipedia covers the measure behind these limits.
Common questions about mortgage affordability and DTI
What is the 28/36 rule this calculator uses?
It’s a lending guideline that caps housing costs at 28% of gross monthly income (the front-end ratio) and all debts including housing at 36% (the back-end ratio). The calculator uses whichever limit is lower as your maximum payment.Why did my result use the 36% limit instead of 28%?
With little or no monthly debt, the 28% limit is usually the tighter one. Once your debts are more than 8% of gross monthly income, the 36% limit minus those debts becomes the smaller number and sets your payment.How much mortgage can I qualify for with an 80k salary?
With no other debts, $400 a month for tax and insurance, 6.5% and a 30-year term, about $232,043. With $800 of monthly debts the same income supports about $189,853.Does this calculator include private mortgage insurance (PMI)?
Not as its own field. PMI usually applies when you put down less than 20%, so if you expect to pay it, add an estimate to the tax and insurance field and it will come off your maximum payment.How much does a bigger down payment increase what I can afford?
Dollar for dollar. The down payment is added to the loan amount to give the home price, and it doesn’t change the monthly payment you can carry, so $10,000 more down means a $10,000 higher price.Why does a 15-year term lower my affordable price?
A shorter term repays more principal each month, so the same maximum payment supports a smaller loan. Expect a noticeably lower home price at 15 years even at the same interest rate.Related Calculators
Once you know your affordable price range, you can work out the actual monthly mortgage payment for a specific loan amount, check your debt-to-income ratio before you apply for financing, or budget ahead using a closing cost estimate for your purchase.