BlueSky FI

A common guideline is 2.5 to 3 times your gross annual income, which would put you in the $250,000 to $300,000 range on a $100K salary. However, your actual number depends heavily on your existing debts, down payment size, interest rate, and local property taxes — which is exactly what this calculator figures out for you.

Most conventional lenders want your front-end DTI (housing costs only) below 28% and your back-end DTI (all debts including the mortgage) below 36%. FHA loans allow up to 43% back-end, and some lenders go even higher with strong compensating factors like excellent credit or large cash reserves.

Yes, student loans directly reduce your purchasing power because lenders count your monthly student loan payment toward your back-end DTI ratio. Even income-driven repayment plans with low current payments are factored in, though different loan programs calculate the impact differently.

A larger down payment helps in two ways: it reduces the loan amount (lowering your monthly payment and total interest), and if you put down 20% or more, you avoid PMI — an extra monthly cost that can be $100 to $300+ per month. Both effects mean you can either afford more house or have a more comfortable payment.

Beyond the mortgage payment, many buyers underestimate closing costs (2-5% of the purchase price), ongoing maintenance (budget 1% of home value per year), homeowners insurance, property taxes, and potential HOA fees. Moving costs, furniture, and immediate repairs or upgrades also add up quickly in the first year.