Getting pre-approved for a certain loan amount doesn’t necessarily mean you should spend up to that limit. Lenders calculate mortgage affordability using formulas like the 28/36 rule — no more than 28% of gross monthly income on housing costs, and no more than 36% on total debt — but that formula doesn’t account for your personal spending habits, savings goals, or local cost of living.
Before house hunting, it’s worth running your own numbers independently of what a lender approves you for. Consider your debt-to-income ratio first, since that’s one of the biggest factors lenders weigh, and think through whether buying even makes sense right now compared to renting using our rent vs buy calculator.
Once you have a realistic budget in mind, use our free mortgage affordability calculator to see what monthly payment fits comfortably within your income. From there, our mortgage calculator can help you compare loan terms, interest rates, and down payment scenarios side by side.