🏠 How Much House?

Savings, as calculated by holdings in this space to use toward the down payment.

Income and monthly debt expenditure determine your DTI ratio, one of the biggest factors in mortgage lending. Monthly debt payments here include other loans, from current mortgage, to car loans, and student loans. For credit cards, it's just the carried interest portion of your bill.

There are a million types of mortgage, but here we default to the best rate at an open credit union (not-for-profit) lender. To see 150+ rates compared, see our blog post on Credit Union Mortgage Rates.

Most lenders dealing with qualified mortgages want to see DTI below 43%, though some loans may stretch to 50% in special cases. While these maximums represent what lenders will approve, financial experts typically recommend keeping DTI below 36% to maintain financial flexibility and account for life's surprises.

Over the last few decades, average DTI has typically varied between 10-13% (see below), with extremes during subprime mortgages and COVID. Households with no debt, whether renters or owners, bring this figure down significantly. (St. Louis Fed)

On average, Americans (renters or homeowners) spend around 33% on housing, with renters having a higher median housing cost as a percentage of income (31.0%) compared to homeowners (21.1% for homeowners with a mortgage and 11.5% for those without a mortgage) (census.gov).