Income to Mortgage Calculator

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.

The 28% has to cover more than the loan

This is where most affordability calculators, including an earlier version of this one, overstate what you can buy. Lenders measure the front-end ratio against PITI: Principal, Interest, Taxes and Insurance, plus HOA dues where they apply. Only part of that $2,100 goes to the bank.

On a $400,000 home, a realistic monthly split looks like this:

That $517 difference is not a rounding error. At 7% over 30 years it is about $78,000 of borrowing capacity. Enter your tax rate, insurance and HOA below and the calculator subtracts them before converting what remains into a loan.

Down Payment Impact:

If home price is $375,000 with 20% down ($75,000): the mortgage is $300,000, inside the $315,000 limit.

Interest Rate Sensitivity:

Read that last column carefully, because it covers the loan payment and nothing else, which is exactly the mistake the section above is about. Taxes and insurance sit inside the same 28%, and every $50 a month of them adds about $2,100 a year to the income you need. The $517 of tax and insurance in the table above turns the 7% row from $85,500 into roughly $107,700.

Working the other way, from a house you have already found back to the salary it demands, is the required salary calculator.

Practical Tips:

• Lenders qualify you on gross income, before tax, not on what actually lands in your account
• 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