This calculator finds the smaller of two payment ceilings — 28% of gross income, or 43% of gross income minus your existing debts — and prices a 30-year loan against whichever one binds. A low- or no-debt household is usually capped by the 28% line, not the 43% one, even though 43% is the number most people watching their DTI keep an eye on.
Why the smaller number wins
The module computes two independent ceilings from the same gross monthly income — a front-end maximum at 28% and a back-end maximum at 43% minus your monthly debts — and then takes whichever is lower as the actual payment it prices a loan against. That minimum of the two step is easy to miss: it means the front-end 28% line, not the more commonly cited 43% back-end line, is the one that typically limits a low-debt borrower's result.
Worked example — where the 28% line actually bites
What triggers each note
Beyond the headline numbers, the module runs four independent checks and appends plain-language notes only when a condition is actually met — it does not narrate results that pass cleanly.
- ·Credit score "poor". The only input that flips the calculator's overall likelyQualifies flag to false. Its own copy pins this band below a 580 score and suggests FHA financing with 10% down as an alternative path.
- ·Credit score "fair". Does not block the result, but adds a note pointing at the 580–639 range, FHA availability, and an expectation of a higher rate than the one you entered.
- ·High existing debt. Fires when monthly debts exceed 20% of gross income — a separate, stricter check than the 43% back-end ceiling used in the main calculation. A household can clear the 43% test and still trip this note.
- ·Down payment vs. loan size. Fires when the down payment is under 3.5% of the maximum loan amount the calculator computed — not 3.5% of home price. In the $9,000-income example above, that threshold is about $13,650 (3.5% of the ~$390,000 max loan); a $10,000 down payment falls under it and triggers a reminder to budget 2–3% of home price for closing costs on top.
Why this number can move once a lender looks
Every input here is self-reported and unverified — that is the definition of a prequalification rather than a preapproval. Three gaps specifically separate this estimate from a lender's formal number:
- The payment is principal and interest only. No property tax, homeowners insurance, HOA dues or mortgage insurance is added, so a lender's real qualifying payment — and therefore real DTI — will be higher than what this page shows.
- The term is fixed at 30 years inside the module. A 15-year quote, or an ARM, would price a different payment against the same 28%/43% ceilings and change which one binds.
- The credit-score input is a self-selected band, not a pulled score. A lender's underwriting will use an actual score, and can apply overlays this calculator has no way to model.
There's a ceiling worth checking independently of any of this: the 2026 FHFA conforming loan limit of $832,750 for a one-unit home in most counties, rising to $1,249,125 in designated high-cost areas. If the maximum loan amount this calculator produces is above that line for your county, the result describes a jumbo scenario, not a conforming one — a different set of underwriting rules than the flat 28%/43% guideline this tool is built on.
One more thing worth flagging if a higher price range is in play: mortgage interest is only deductible on the first $750,000 of acquisition debt under current IRS rules (Publication 936) — a maximum loan amount above that figure means part of the interest on it would not be deductible at all, which is worth knowing before treating a large prequalification number as fully affordable.
Methodology
Front-end (28%) and back-end (43%) ceilings, the minimum-of-the-two payment rule, the fixed 360-month amortization, and every note-trigger condition (credit band, 20% debt-to-income, 3.5% down-payment-to-loan ratio) are read directly from this calculator's own module. The worked example uses Freddie Mac's PMMS 30-year average for the week ending September 3, 2026. Conforming loan limit and mortgage interest deduction cap figures are FHFA's 2026 announcement and IRS Publication 936, respectively.
Sources
- Freddie Mac — Primary Mortgage Market Survey, week ending September 3, 2026 — accessed 2026-09-05
- FHFA — Conforming Loan Limit Values for 2026 — accessed 2026-09-05
- IRS Publication 936 — Home Mortgage Interest Deduction (2025) — accessed 2026-09-05