Affordability calculator

What "monthly debt payments" means

Only the debts that show up on your credit report and carry a required monthly payment: car loans and leases, student loans, credit card minimums, personal loans, child support and alimony. Not groceries, utilities, phone bills, insurance, or day care, all of which matter enormously to your life and not at all to your debt-to-income ratio.

That's worth sitting with for a second, because it cuts both ways. A lender may approve you for a good deal more than you should actually spend, and the same math may decline someone who is obviously fine over a single car payment. Both of those happen weekly.

The debt-to-income limit is the whole ballgame

Change the DTI dropdown and watch the number move, because that one setting does more work here than anything else on the page. Conventional loans commonly go to 45%, and sometimes to 50% with strong compensating factors (extra reserves, a large down payment, a long job history). FHA can go higher than that, and non-QM programs vary all over the place. The 36% option isn't a lending limit at all, it's roughly where most people report feeling comfortable rather than stretched.

Where this calculator is optimistic

It assumes conventional financing, a 0.55% mortgage insurance estimate above 80% loan-to-value, and an income that's straightforwardly documentable. But if you're self-employed, the income figure a lender uses is often quite different from the number you'd call your income, and usually lower, which is the whole reason bank statement programs exist in the first place.

Common questions

Is this the same as a pre-approval?

No. A pre-approval means a lender has reviewed actual documents and pulled your credit, and a calculator has done neither of those things. Sellers know the difference, and so do their agents.

Should I buy at the top of what I qualify for?

Usually not. The maximum is a lending limit rather than a recommendation, and I'd rather you close comfortably and still like the house three years from now.

What if I have no down payment?

There are real options here, including VA at zero down, USDA in rural areas, low-down conventional and FHA, and Oregon down payment assistance up to $60,000 or 20% of purchase price for eligible first-time buyers. Ask me, because the answer depends on details a calculator can't see.