🏦 How Much House?
The magic number that lenders use to determine reasonable mortgage amounts is called the Debt-to-Income ratio (DTI). DTI is your monthly debt payments compared to your gross monthly income. In a broader financial context, DTI is sometimes called the Household Debt Service Ratio (DSR).
This view uses your space’s calculated DTI to estimate an amount mortgage lenders are likely to approve.
Show Me the Savings 💰
Savings, as calculated by holdings in this space to use toward the down payment.
Down Payment Amount
Cashflows 💸
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.
Mortgage Terms 🏦
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.
Debt Reality Check ⚖️
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.
Current DTI ratio
The Boring Details 🥱
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).
🏘️ The Bottom Line
Monthly Headroom
Mortgage Principal
Max House Price
Max Payment
Last updated by heyfinfam (v26.6.2) · View history
Privacy: None of your data is transmitted to the author of this view or any other third parties. Financial inputs are not used to for identification purposes, and are only used to calculate the result.
Disclaimer: This content and any calculations provided are for informational purposes only. The views, calculations, and methodologies expressed are those of the author and do not necessarily reflect those of this platform. Not financial advice. Users are solely responsible for any decisions made based on this information.
More by @heyfinfam
Based on "I Ranked Every Lexus Model by True Cost of Ownership (Results Are Shocking!)" by Everything Lexus. Which Lexus model offers the best 5-year financial value?
What is the estimated cost of a rhinoplasty based on procedure complexity and included fees?
Based on "How Much Does a Nose Job Cost? (Rhinoplasty)" by Austin-Weston, The Center for Cosmetic Surgery. Estimating the true cost of a quality rhinoplasty and evaluating financing options
Based on "The Costs Of Heating Your Home With Wood vs Propane" by AmericanOutdoors. Switching to or supplementing home heat with a wood stove