How much house can I afford?
Lenders size a mortgage with two debt-to-income ratios. The front-end ratio caps housing costs at about 28% of gross monthly income; the back-end ratio caps housing plus all other debt at about 36%. On a $90,000 salary that's roughly $2,100/month for housing, or less if you carry car and card payments. Whichever limit binds first sets your maximum price.
What is the 28/36 rule?
It's the classic lender guideline: spend no more than 28% of gross monthly income on housing (mortgage, taxes and insurance), and no more than 36% on total debt including the mortgage. Qualified-mortgage rules stretch the back-end to 43%, but budgets get tight there. This calculator lets you compare conservative, standard and maximum scenarios.
Does a bigger down payment let me buy more house?
Yes, dollar for dollar — the down payment adds directly to the price you can afford on top of the loan your income supports. But if your back-end ratio is the binding limit, paying down a car loan or credit card can raise your budget faster than saving the same amount for a deposit, because it frees monthly income rather than just adding cash.
Should I borrow the maximum I qualify for?
Usually not. Lender ratios use gross income and ignore childcare, retirement saving, commuting and maintenance — typically 1–2% of the home's value a year. Many buyers target the conservative 25/33 band so the payment still works if rates reset, income dips, or life gets more expensive.
What costs does a lender not count that I still have to pay?
Affordability tests focus on mortgage, tax and insurance, and typically ignore maintenance, service charges, utilities, commuting and furnishing the place. Maintenance alone is commonly estimated at around 1% of the property value a year, averaged over time — invisible for several years, then a roof or a boiler arrives at once. Older and larger homes cost more to run than the calculation implies. Budgeting only to the approved figure is how people end up technically able to pay the mortgage and unable to afford the house.
How do student loans and car payments affect what I can borrow?
They reduce it, usually more than people expect, because lenders work from a debt-to-income ratio that counts all recurring commitments rather than the mortgage alone. A car payment of a few hundred a month can lower the sum you qualify for by a substantial multiple of that amount, since it consumes part of the same monthly capacity. Clearing or reducing a short-term debt before applying can therefore increase borrowing power considerably — which is worth modelling before you commit to a new car during a house search.