Income to Mortgage Calculator
Calculate how much house you can afford based on your income.
Uses the 28/36 rule to estimate your maximum mortgage and home price.
The income-to-mortgage ratio determines the maximum mortgage you qualify for based on your gross income, debts, and prevailing interest rates. Lenders use debt-to-income (DTI) ratios as the primary qualifying tool.
The Key Ratios:
Front-end DTI (housing ratio) = Monthly housing payment / Gross monthly income ≤ 28%
Back-end DTI (total debt ratio) = (Housing + All monthly debts) / Gross monthly income ≤ 36–43%
Maximum Mortgage Formula:
Max monthly payment = Gross monthly income × 0.28
Max mortgage = Max monthly payment × Loan factor
Loan factor at 7% APR, 30-year term ≈ 150 (meaning $1 of monthly payment supports ~$150 of loan)
Worked Example:
Annual income: $90,000 → Gross monthly: $7,500
Max housing payment: $7,500 × 28% = $2,100/month
Max mortgage (7% APR, 30yr): $2,100 × 150 = $315,000
With existing debts (car $400/month, student loan $200/month): Back-end DTI: ($2,100 + $600) / $7,500 = 36% — just within conventional lending limits.
Down Payment Impact:
If home price is $375,000 with 20% down ($75,000): mortgage = $300,000 — fits within the $315,000 limit.
Interest Rate Sensitivity:
| Mortgage Rate | Monthly Payment on $300,000 | Income Needed (28% DTI) |
|---|---|---|
| 5% | $1,610 | $69,000/year |
| 6% | $1,799 | $77,000/year |
| 7% | $1,996 | $85,500/year |
| 8% | $2,202 | $94,000/year |
Practical Tips:
- Lenders use gross income, not net — before taxes
- Rental income counts at 75% of gross rent for qualifying
- FHA loans allow back-end DTI up to 50% in some cases; conventional loans typically cap at 43%
- A larger down payment reduces the mortgage and monthly payment without requiring more income