How the calculator works (and why PITI + HOA is the only number that matters)

“Affordability” is not a purchase price. It’s a monthly cash-flow decision that has to survive normal life: fluctuating insurance premiums, property tax differences between neighborhoods, HOA dues, and your existing debts. When buyers focus on list price first, they tend to under-estimate recurring costs and accidentally commit to a home that only works on best-case numbers.

This calculator uses a budget-first approach: you set a monthly housing budget and the tool estimates what purchase price that budget can support when your payment includes the full stack — principal, interest, taxes, insurance, and HOA. The output is not a lender quote or an approval. It’s a planning estimate designed to keep your search anchored to reality.

What 28/36 DTI means (and why it’s used)

The 28/36 guideline is a common underwriting reference point: roughly 28% of gross monthly income for housing costs and around 36% for total debt (housing + other monthly debts). Some borrowers can qualify at higher ratios, and some loan programs have different rules, but using a conservative guideline has one huge advantage: it helps you avoid becoming house-poor in the real world.

The calculator shows you both ratios so you can see what’s tight: you might be under 36% total DTI but still above 28% housing ratio — which can feel okay on paper, but often feels stressful in practice.

Why Texas buyers get surprised by “the monthly payment”

In many Texas markets, two homes with similar prices can have wildly different monthly realities because property taxes and insurance vary. Even when a lender can technically approve a payment, the lifestyle impact is what matters: cash flow, schedule pressure, and the ability to handle repairs, childcare, or unexpected costs without panic.

Step-by-step: how to use this calculator in under 5 minutes

If you want this tool to be useful, don’t game it. Use honest inputs and treat it as a filter. Here’s the fastest workflow that produces a realistic shopping range.

1. Set income and debts first. Income creates the ceiling; debts lower the ceiling. Use gross household income for the guideline view.
2. Pick a realistic interest rate tier. If you don’t know, choose the middle tier and update later.
3. Choose down payment. This changes loan amount and therefore P&I. (Note: PMI is not included here.)
4. Set your monthly housing budget (PITI + HOA). If you’re not sure, use the “Use 28/36 max” button, then decide if you want to be below it for comfort.
5. Add taxes + HOA. If you don’t know exact taxes yet, turn on Auto and use a conservative tax rate assumption for your target area.
6. Enter your current insurance premium. Then enter a plausible lower quote to see the leverage — or use the Canopy quote link and plug in the real number.

How to interpret the result (what the price estimate actually means)

The big number on the right is an estimated maximum home price that your monthly housing budget can support under the inputs you chose. It is not a guarantee. It can still be too high for your real comfort level, or too low if you qualify under different guidelines. But it’s a powerful planning filter because it forces every neighborhood comparison to follow the same rules.

If the number feels “wrong,” it’s usually because one of the inputs is where real life differs from assumptions: property taxes are higher than expected, insurance is higher than expected, HOA is higher than expected, or your interest rate tier is too optimistic. That’s not a bug — that’s the point. The calculator is showing you where your plan is fragile.

Why the “Lower Quote” scenario matters

Insurance is one of the most overlooked drivers of affordability — and also one of the most variable. The “Lower Quote” scenario lets you compare your current premium to a possible alternative quote while keeping every other input the same. The result is a clean “apples-to-apples” view of how insurance costs can change your buying power.

If your lower quote scenario meaningfully increases buying power, don’t guess. Get a real quote early — before you fall in love with a home that only works if insurance stays unrealistically low.

Common buyer mistakes this tool helps you avoid

• Shopping by list price instead of monthly cost. List price is not your payment.
• Using best-case taxes. A plan that only works when taxes are low is not stable.
• Ignoring HOA. Even a “small” HOA can erase buying power over time.
• Assuming insurance is a fixed number. Premiums vary. Shop early.
• Stretching your budget to feel “approved.” Approval and comfort are not the same goal.

Next steps after you run the calculator

Use this as a planning range, then validate with real numbers. When you find a neighborhood that passes the filter: (1) verify property taxes on the specific address, (2) get an insurance quote for that home type and location, (3) confirm your actual interest rate and loan program with your lender, and (4) re-run the calculator with those real inputs.

If you want to keep your process tight, pair this with your payment and closing cost planning tools (payment, cash-to-close, and escrow setup). The goal is to avoid surprises, not to chase the highest possible purchase price.