A home you love A budget you can live with.
Set a budget from payment and closing cash.
Your modeled home-price ceiling
Limited by available cash after your reserves.
Includes principal, interest, taxes, insurance, HOA and estimated PMI.
Two limits. One useful starting point.
- Price supported by monthly budget
- $497,797
- Price supported by closing cash
- $375,000
- Down payment at this price
- $75,000
- Estimated loan amount
- $300,000
This is a planning ceiling, not a spending recommendation or lender decision. Gross income is not take-home pay. Credit, loan limits, employment, taxes, maintenance, childcare and other living costs can change what works for you.
The reserve amount is kept out of your down payment and closing-cost budget. A lender's maximum and your comfortable payment are different numbers.
Set a ceiling before you shop
Follow the assumptions into the result so a single headline number never stands alone.
- 01Protect reservesSet aside the cash you will not use at closing.
- 02Set a monthly limitChoose housing and total-debt targets that fit your plan.
- 03Stress the ceilingChange price, rate, taxes, and insurance before treating the result as a range.
How the calculation works
A housing-payment budget is set from the smaller of your housing-to-income target and your remaining total-debt target after other monthly debts.
A separate cash-based price limit is solved from your savings, minus protected reserves, spread across down payment, closing costs and prepaids. The lower of the payment-based and cash-based prices becomes the modeled ceiling.
Worked example
Worked example with the default inputs. $130,000 income, $500/month other debts, $100,000 cash, $15,000 reserves, 20% down payment target, 28% housing-DTI target, 36% total-DTI target, 2% closing costs, $2,500 prepaids, 6.25% rate, 30-year term.
- The housing-payment budget from the DTI targets is about $3,033.33/month.
- The payment-based limit alone would support a price of about $497,797.34.
- The cash-based limit, protecting the $15,000 reserve, supports only about $375,000, so cash is the binding constraint.
Modeled price ceiling ≈ $375,000, needing about $85,000 in cash and a monthly payment of about $2,315.90.
Assumptions
- DTI targets, reserve amount and closing-cost percentage are editable planning inputs, not universal lender limits.
- The model does not check credit, verify income or apply a specific loan program’s underwriting rules.
When to use this
Use this page to set a realistic price ceiling before house-hunting, and to see which limit, monthly payment or available cash, controls your budget.
Common mistakes
- Treating the DTI targets as guaranteed approval limits rather than editable planning assumptions.
- Ignoring the reserve amount, which is deliberately excluded from the cash available for a down payment.
Big decisions. Clearer answers.
What is actually in a mortgage payment?
Separate principal and interest from taxes, insurance, HOA, PMI and upfront closing cash.
15-year or 30-year mortgage: compare the right numbers.
Compare required payments, interest costs and the flexibility of extra payments on 15-year and 30-year fixed mortgages.
PMI removal: a request is not the automatic date.
Understand the difference between requesting conventional PMI cancellation at 80% and automatic termination on the original schedule.
Your monthly budget and your closing cash both matter.
The model first limits housing costs to the smaller of your housing-to-income target and your total-debt target after other debt payments. It then calculates the price supported by that payment, including your property-tax and PMI assumptions. A separate cash limit protects the reserves you choose and allows for a down payment, closing fees and prepaids. The lower of the two prices becomes your modeled ceiling, not a recommended spending target.
A few things you
might be wondering.
No fine-print scavenger hunt required.
Read the full methodology
Is this a mortgage preapproval?
No. It does not assess credit, verify employment, apply lending-program rules or check loan limits. It is a budgeting scenario using the numbers you enter.
Why does the default use 28% and 36%?
They are editable example planning targets: housing costs as a share of gross income, and total debt payments as a share of gross income. They are not universal lender limits.
Why do my reserves lower the result?
The reserve amount is deliberately excluded from the cash available for your down payment and closing costs. Increasing savings or reducing the reserve assumption changes the cash-supported price.
Can I turn the result into a mortgage plan?
Yes. Select Explore this mortgage to open a prefilled payment calculator using your affordability assumptions. You can then inspect the schedule and compare different terms.
Source references: CFPB: Loan Estimate explainer
Sources checked 2026-09-11. Educational software; no professional review claimed.
A home for your plans.
Explore the numbers before you make the next move.