Home price by interest rate and monthly debts
Each cell is the highest price whose full monthly payment fits both ratios on $110,000 a year with 10% down. Monthly debts are payments on car loans, student loans and cards.
| Rate | No debts | $450/mo debts | $900/mo debts |
|---|---|---|---|
| 5.5% | $377,500 | $377,500 | $351,465 |
| 6.5% | $346,213 | $346,213 | $322,337 |
| 7.5% | $318,628 | $318,628 | $296,654 |
At 6.5% with no other debts the housing ratio is the binding limit and the price is about 3.1 times income. Add $450 of monthly debts and the housing ratio still binds and the price becomes $346,213. A one-point change in rate moves the price by roughly $29,436 at this income.
Home price by down payment (6.5%, $450/mo debts)
| Down payment | Cash down | Home price | PMI / month |
|---|---|---|---|
| 3.5% | $11,402 | $325,775 | $131 |
| 5% | $16,514 | $330,274 | $131 |
| 10% | $34,621 | $346,213 | $130 |
| 20% | $80,917 | $404,584 | $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 $346,213 figure is built
Start from gross monthly income of $9,167. The 28% housing limit is $2,567; the 36% total-debt limit is $3,300, less any other debts. With no debts, the housing limit is lower, so it sets the budget. At a price of $346,213 with $34,621 down, the loan is $311,592. Principal and interest at 6.5% over 30 years come to $1,969 a month, property tax $317, insurance $150 and PMI $130, for a total of $2,567, right at the limit.
A 15-year loan at the same rate supports about $264,648, 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
- $100k a year: about $312,786 with the same assumptions.
- $110k a year: about $346,213.
- $120k a year: about $379,641.
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.