Affordability Calculator

Affordability calculators do not tell you what a lender will approve — they tell you what you can sustainably carry. Approval depends on credit score, employment continuity, asset reserves, and the specific loan program. Affordability depends on the monthly math: how much of your paycheck you want going to a mortgage versus everything else.

What the 28/36 rule says

The 28/36 rule is the long-standing conservative benchmark. Front-end DTI (housing payment / gross monthly income) under 28%, back-end DTI (housing + other monthly debts / income) under 36%. It came out of FHA-era underwriting and remains a useful sanity check: if your numbers exceed it, you are not necessarily unqualified, but you are taking on real squeeze room.

The slider on this calculator runs from 28% to 50% so you can see what each scenario actually buys you. The most common marker after 36% is 43% (the Qualified Mortgage safe harbor), and many modern conventional, FHA, and VA loans go to 45% or 50% with compensating factors like high credit, large reserves, or stable long-tenure employment.

How DTI is actually calculated

DTI counts the minimum required payment on each obligation, not the balance. A $20,000 credit-card balance with a $400 minimum counts as $400/month against your DTI; a $30,000 student loan with a $250/month income-based payment counts as $250 (some programs use 0.5% of the balance instead — talk to your loan officer). It does not count utilities, groceries, gas, daycare, insurance premiums (other than the homeowner's policy and PMI), or savings. So your real budget squeeze is always tighter than the DTI suggests.

Front-end vs back-end

Front-end DTI tells you how much of your paycheck the house alone consumes. A 32% front-end means roughly a third of every gross dollar goes to PITI before any other obligation. Back-end DTI adds in the other debts and is what most underwriters key on, because it captures total monthly burden. A 43% back-end DTI on a borrower with no other debts means the house itself is at 43% — uncomfortable. A 43% back-end DTI on a borrower with $1,200/month of car and student-loan payments means the house might only be at 28-30% — much easier to live with.

Why Texas affordability differs from coastal markets

Property taxes drive most of the gap. A $400,000 Texas home at 2.0% pays ~$667/month in property tax — about double what the same home would pay in California (1.0% effective) or Florida (~1.0% effective). On the other hand, Texas has no state income tax, so your gross-to-net is friendlier — and home prices in DFW, Austin, San Antonio, and Houston still buy materially more square footage than coastal equivalents. The net effect is that Texas families typically afford bigger homes on smaller incomes than coastal peers, even after the tax-escrow drag.