Home price by interest rate and monthly debts
Each cell is the highest price whose full monthly payment fits both ratios on $100,000 a year with 10% down. Monthly debts are payments on car loans, student loans and cards.
| Rate | No debts | $400/mo debts | $800/mo debts |
|---|---|---|---|
| 5.5% | $341,052 | $341,052 | $320,224 |
| 6.5% | $312,786 | $312,786 | $293,685 |
| 7.5% | $287,864 | $287,864 | $270,285 |
At 6.5% with no other debts the housing ratio is the binding limit and the price is about 3.1 times income. Add $400 of monthly debts and the housing ratio still binds and the price becomes $312,786. A one-point change in rate moves the price by roughly $26,594 at this income.
Home price by down payment (6.5%, $400/mo debts)
| Down payment | Cash down | Home price | PMI / month |
|---|---|---|---|
| 3.5% | $10,301 | $294,321 | $118 |
| 5% | $14,919 | $298,386 | $118 |
| 10% | $31,279 | $312,786 | $117 |
| 20% | $73,104 | $365,521 | $0 |
Reaching 20% down removes private mortgage insurance, which is why the jump from 10% to 20% is larger than the extra cash alone would suggest: the PMI money goes back into the principal-and-interest budget.
How the $312,786 figure is built
Start from gross monthly income of $8,333. The 28% housing limit is $2,333; the 36% total-debt limit is $3,000, less any other debts. With no debts, the housing limit is lower, so it sets the budget. At a price of $312,786 with $31,279 down, the loan is $281,507. Principal and interest at 6.5% over 30 years come to $1,779 a month, property tax $287, insurance $150 and PMI $117, for a total of $2,333, right at the limit.
A 15-year loan at the same rate supports about $239,096, because the same budget has to repay principal twice as fast; it builds equity much sooner and costs far less interest over the life of the loan. See 15-year vs 30-year mortgages.
Comparing nearby incomes
- $90k a year: about $279,358 with the same assumptions.
- $100k a year: about $312,786.
- $110k a year: about $346,213.
Before you shop at this price
The ratios describe what a lender may approve, not what feels comfortable. They use gross pay and ignore retirement saving, childcare and commuting. Many buyers aim below the 28% line to keep room for repairs, which often run around 1% of a home's value a year. Check the payment on a specific listing with the mortgage calculator, weigh buying against renting with the rent vs buy calculator, and read the 28/36 rule guide for how lenders apply the ratios.