House affordability calculator

Fannie Mae and Freddie Mac established debt-to-income guidelines decades ago. 28% front-end (housing only) and 36% back-end (all debt) became standards because data showed higher ratios predicted default. Lenders use these to limit risk, not to advise you on comfort.

HOA fees of $400/month ($4,800/year) over 30 years is $144,000, before any increases. HOAs typically raise fees 3-5% annually. That $400/month becomes $800/month in 15 years. The fee covers common area maintenance but is mandatory and not tax-deductible.

Plan for 1% of home value annually for homes under 10 years old, 1.5-2% for older homes. A $400,000 home needs $4,000-$8,000/year set aside. A roof, HVAC system, and appliance replacements will cost $30,000-$50,000 over 20 years.

Using the 28% rule, $100,000 gross income is $8,333/month, so housing should stay under $2,333/month. After setting aside $600/month for taxes, insurance, and maintenance, you have about $1,733 for the mortgage. At 7% for 30 years, that supports roughly a $260,000 loan — a $325,000 house with 20% down.

No. Buying at your maximum leaves no margin for repairs, job changes, or rate increases. A safer approach: buy at 20-25% of income rather than 28%, and save the difference. Financial flexibility is worth more than extra square footage.

20% avoids PMI (private mortgage insurance, $100-$300/month). 10-15% is common. Below 10% increases costs significantly. Some programs allow 3-5% down for first-time buyers, but you'll pay PMI and higher rates. More down payment = lower monthly cost and faster equity building.

No. Renting can be cheaper than owning when you factor in maintenance, opportunity cost of the down payment, and transaction costs (6-10% to buy and sell). In expensive markets, renting and investing the difference often wins financially. Run the actual numbers for your situation.