Max Purchase Price Calculator

What this calculator solves

House hunting starts backwards here. You know what you earn, what you already owe, and how much cash you have saved. The question is the biggest price tag those three facts can carry. A realtor shows you houses and a lender approves a loan; this page finds the number where the two meet before you tour a single open house.

The tool runs the math the way an underwriter does. It caps your total housing payment, subtracts the costs that are not principal and interest, converts the rest into the largest loan a fixed rate can support, and adds your down payment. Closing costs come out of your cash first, so the price reflects what you can write checks for.

The result is a ceiling, not a target. Lenders add credit score rules, cash reserves and job history on top of these ratios, and a payment that fits on paper can still feel tight in month three. Most buyers land under the maximum on purpose.

The two DTI ceilings, and which one binds

Two ratios govern the payment cap. The front end limits housing costs alone: payment divided by gross monthly income. The back end limits housing plus every other monthly debt: car loans, student loans, credit card minimums. Your working budget is the smaller of the two caps, and your existing debts decide which one bites.

The classic 28/36 rule sits at the conservative end, and it is a guideline, not law. Fannie Mae's Selling Guide (section B3-6-02, updated April 2025) caps manually underwritten loans at 36 percent, allows 45 percent with strong credit and reserves, and lets loans approved by its DU system reach 50 percent. FHA's Handbook 4000.1 starts at 31/43 for manually underwritten loans and stretches further with compensating factors, per HUD's own guidance.

The 43 percent figure has a legal history. Under the original Ability to Repay rule, a loan with a DTI at or below 43 percent could qualify as a safe harbor qualified mortgage. The CFPB's General QM final rule of December 2020, with mandatory compliance from July 2021, removed that DTI limit and replaced it with a price based threshold tied to the average prime offer rate. The 43 percent number survives as a common institutional benchmark, so the calculator lets you set any ceiling and shows what each one buys.

Same borrower, four ceilings, a $146,820 spread in maximum price. That spread is why the ratio you assume matters more than the quarter point you argue about with the lender.

From a payment cap to a price: the formulas

Step one is the payment budget. Housing cap = gross monthly income x front end ratio. Total cap = gross monthly income x back end ratio, minus existing monthly debts. The working budget is the smaller of the two. On the $96,000 example, 28 percent of $8,000 gives $2,240, while 36 percent minus $550 of debts gives $2,330, so the front end binds.

Step two strips out the non loan costs. Property tax, insurance, HOA dues and PMI all ride inside the same monthly payment, so they eat the budget before principal and interest get any. What is left is the most the loan payment can be.

Step three converts a payment into a loan size. For a monthly rate i and n payments: P = M x ((1+i)^n - 1) / (i x (1+i)^n). At 7 percent for 30 years, i = 0.0058333 and n = 360, and each $1 of monthly payment supports $150.31 of loan. A $1,693 payment therefore carries about $254,500 of debt.

Step four adds the down payment and backs out closing costs. With $60,000 of cash and closing at 3 percent of the price, the loan plus the remaining down payment is the maximum price. Because closing costs and property taxes both scale with the price, the calculator loops the math until the numbers agree with each other; a single pass would leave them inconsistent by thousands of dollars.

Worked example 1: $96,000 income with debts

Take the defaults: $96,000 salary, $550 of monthly debt payments, $60,000 in cash, a 7 percent 30 year loan, 28/36 ratios, taxes at 1.1 percent of price, $1,800 a year in insurance, no HOA, and 3 percent closing costs. The front end cap of $2,240 binds. After $280 of taxes, $150 of insurance and $117 of PMI, principal and interest get $1,693. The annuity factor turns that into a $254,533 loan.

Closing costs of $9,161 come off the $60,000 first, which leaves $50,839 for the down payment, or 16.6 percent down. The ceiling lands at $305,372, call it $305,000. Total monthly outflow is $2,240 for the house plus $550 for other debts, a 34.9 percent back end DTI, safely under the 36 percent line.

PMI takes $117 of the budget every month, which is roughly $17,500 of forgone loan capacity. It exists because 16.6 percent down sits under the 20 percent line. The section below shows what happens when the cash crosses it.

Worked example 2: $130,000 income and a big cash budget

Same rates and ratios, but $130,000 of income, no other debts, $150,000 in cash, and $2,400 a year in insurance. The housing cap is $3,033. After $452 of taxes and $200 of insurance, principal and interest get $2,381, which carries a $357,927 loan. Closing costs take $14,794, leaving $135,206 for the down payment, 27.4 percent of the price. No PMI applies. The ceiling comes to $493,133, call it $493,000.

The front end ratio still binds, and the back end sits at the same 28 percent because there are no other debts. More income stopped mattering once PMI disappeared; the 28 percent housing line did the limiting in both examples. That is the normal case for buyers without car payments or student loans.

Cash needed at the closing table: $135,206 down plus $14,794 in closing costs, exactly the $150,000 budgeted. Anything else, the appraisal gap, the movers, the first grocery run, has to come from somewhere else.

What half a point of interest does to the price

The payment cap does not move with rates, so the loan size absorbs the whole change. For the $96,000 example, every 0.5 point of rate cuts the ceiling by roughly $10,000 to $11,000.

Across a full point, from 6.0 to 7.0, the ceiling drops $22,125, about 6.8 percent of the price. For context, Freddie Mac's Primary Mortgage Market Survey put the 30 year fixed average at 7.32 percent for the week of October 22, 2026, so a 7 percent example is not exotic. Rates are an input on this page, not a forecast; type the quote you have.

The same math runs in reverse. If rates fall half a point after you buy, a refinance recovers part of the ceiling you left on the table. If rates rise, the price you paid still stands; only your refinance options shrink.

How down payment cash and PMI move the ceiling

Extra cash lifts the price dollar for dollar until the down payment crosses 20 percent, then the lift jumps. PMI disappears at that line, which frees monthly budget for a bigger loan.

Read the jump between $70,000 and $80,000 of cash: $23,513 of extra buying power from $10,000 of savings. The down payment crosses 20 percent, PMI drops out of the payment, and the freed dollars become loan capacity. Below the line, each $10,000 of cash adds about $8,600 of price; above it, about $8,600 plus the PMI savings.

There is a counterargument: keeping $10,000 in the bank against a dead water heater beats saving $117 of PMI. The calculator shows the ceiling, not the wisdom of touching it.

What the payment includes, and what the lender adds

Lenders qualify you on PITI: principal, interest, taxes and insurance, plus HOA dues and PMI when they apply. A price that fits with principal and interest alone can fail once escrow lands in the bill. Property tax rates run from under 0.5 percent to over 2 percent of home value depending on the state, and insurance premiums have climbed hard in coastal and wildfire states. Raising the tax input in example 1 from 1.1 to 2.0 percent cuts the ceiling by about $25,500, more than a full point of interest would.

HOA dues come straight out of the budget too. A $300 monthly fee in example 1 lowers the ceiling by $36,402, to $268,970, because that $300 comes off the payment before principal and interest and then gets multiplied by the 30 year annuity factor.

On top of the ratios sit rules this page does not model: minimum credit scores, cash reserves, debts that never reach a credit report, and the conforming loan limit. FHFA set the 2026 baseline for one unit properties at $832,750, so both examples clear the line easily, but a jumbo loan changes which ratios a lender will accept.

The final number is a negotiating ceiling, not a promise. The appraisal, the inspection results and your own tolerance for a tight month all pull the price back down. The honest use of this page is to set the walk away point before the emotional part of buying starts.