What your result means
The calculator uses the lower of the chosen housing-only limit and total-debt limit, then estimates a price whose principal, interest, taxes, insurance, and HOA fit that monthly budget.
Formula and assumptions
Housing limit = gross monthly income × front ratio. Debt-adjusted limit = gross monthly income × back ratio − monthly debts. Maximum housing payment is the lower value. A numerical search solves for price.
- Income is stable gross income before taxes.
- Debt input includes recurring obligations used by underwriting.
- The entered ratios are planning assumptions, not approval standards.
Worked example
With $120,000 annual income, gross monthly income is $10,000. A 28% housing ratio allows $2,800; a 36% total-debt ratio less $800 in debts also allows $2,800.
Limitations
Approval also depends on credit, assets, reserves, income documentation, loan type, property, rate, mortgage insurance, lender rules, and other obligations. Comfortable spending can be lower than qualification.