Know What You Can Afford Before You Sign
This calculator uses your income, debts, and savings rate to show a realistic housing budget. No guesswork, no current listing data required.
Your Numbers
Your Housing Budget
Debt-to-Income Breakdown
Rent vs. Buy Comparison
Based on your maximum housing cost, here is how renting and buying could compare over five years.
Renting
Monthly rent: $1,456
Total over 5 years: $87,360
No equity built. Rent may increase each year.
Buying
Monthly mortgage: $1,456
Total over 5 years: $87,360
Equity builds over time. Does not include maintenance, taxes, or insurance.
This is a simplified comparison. Actual costs vary. Talk to a lender for a full estimate.
How to Make Sense of Your Numbers
Let's walk through a real example. Maria earns $5,200 a month before taxes. She pays $450 a month toward a car loan and a credit card. She can save 15% of her income. She lives in a city where housing costs are about 20% above the national average, so she sets the market factor to 1.2.
The calculator shows her maximum monthly housing cost is $1,456. That number comes from the 28% front-end ratio: $5,200 × 0.28 = $1,456. Her back-end ratio with debts is ($1,456 + $450) / $5,200 = 36.6%, which is slightly above the 36% guideline. The calculator uses the lower number to keep her safe.
Her recommended down payment target is $18,720. That is two years of saving 15% of her income: $5,200 × 0.15 × 24 months. The emergency fund target of $8,736 covers six months of housing costs at $1,456 per month. Maria can use these numbers to start looking at apartments or homes in her price range without stretching her budget too thin.
If Maria had no debt, her maximum housing cost would still be $1,456 based on the front-end ratio. The back-end ratio would drop to 28%, giving her more breathing room. The calculator always picks the lower of the two ratios to keep you on solid ground.
Common Questions
What if my debt-to-income ratio is too high?
If your back-end DTI is above 36%, lenders may see you as a higher risk. You can lower it by paying down debts before applying for a mortgage, or by looking for less expensive housing. Some loan programs allow higher DTIs, but staying under 36% keeps your budget safer.
How does the local market factor affect my down payment?
In higher-cost areas, you need a larger down payment to keep monthly payments manageable. The calculator multiplies your two-year savings target by the market factor. For example, a factor of 1.3 means you should aim for 30% more than the base down payment amount.
Are there down payment assistance programs?
Yes. Many states and local governments offer grants, low-interest loans, or matched savings programs for first-time homebuyers. Check with your state housing finance agency or a HUD-approved housing counselor. These programs can reduce the amount you need to save on your own.
Why does the calculator not use current mortgage rates?
Rates change daily and vary by lender. This calculator focuses on the relationship between your income, debt, and savings, which stays more stable over time. Once you know your maximum monthly payment, you can shop for loans that fit within that number.
Assumptions and Limitations
- Uses a 28% front-end DTI ratio and a 36% back-end ratio as defaults. Actual lender guidelines may differ.
- The local market factor is a rough multiplier, not a precise cost-of-living index.
- Down payment target assumes you save consistently for two years. Life happens, so adjust as needed.
- Rent vs. buy comparison does not include property taxes, homeowners insurance, or maintenance costs.
- Emergency fund target is six months of housing costs only. Your full emergency fund should cover all essential expenses.