A verdict, not a payment — risk level, stress test, and whether the down payment is the right call.
Affordability verdict
Stretched
$3,670/mo all-in including maintenance.
PITI + maintenance
The full cost of this home is $3,670 a month once you include $375 of maintenance, which no lender counts and most buyers forget. That's 46% of your $7,900 take-home pay and 30% of gross income. Your back-end debt-to-income ratio is 36%, above the conventional 36% guideline but usually approvable.
At 46% you'd have $3,610 a month for everything else — food, childcare, transport, retirement and any emergency. The lender's ratios use gross income and ignore maintenance entirely, which is why an approval can be comfortably above what your actual budget tolerates. Dropping to a $382,500 home would bring this to 39%.
You'd have $18,000 left, covering 4.2 months of housing and debt payments. New homeowners face immediate costs the inspection didn't catch — a water heater, an HVAC repair, a roof. Arriving at closing with nothing in reserve is the most common avoidable mistake in home buying, and it turns the first surprise into credit card debt at 24%.
At 12% down you're $36,000 short of the threshold. That said, waiting years to reach 20% while prices and rents rise often costs more than the PMI does — and draining your reserves to avoid PMI is worse than paying it. Request removal in writing the moment your balance hits 80% of the purchase price; lenders won't do it early unless asked.
Model PMI removalIf one earner lost hours or a bonus disappeared, this payment would consume 58% of what's left. That's the scenario a mortgage has to survive, because it lasts 30 years and your income won't be flat for all of them. Reserves are what turn that from a crisis into an inconvenience.
You're contributing $900 a month, below 10% of income. Buying a home you can only afford by pausing retirement contributions trades compounding you can't get back for equity you can't spend. If the purchase requires it, the house is too expensive rather than the retirement contribution being optional.
See the retirement costEven when a purchase is affordable, it isn't automatically better. Transaction costs of roughly 8–10% combined need years and appreciation to recover — if there's a real chance you move within five years, renting is often the stronger financial choice.
Rent vs buy comparisonWorked scenarios with the full analysis, so you can see how the numbers move before entering your own.
A common stretch purchase — approvable, but tight on reserves and retirement saving.
Affordability verdict
Stretched
The full cost of this home is $3,670 a month once you include $375 of maintenance, which no lender counts and most buyers forget. That's 46% of your $7,900 take-home pay and 30% of gross income. Your back-end debt-to-income ratio is 36%, above the conventional 36% guideline but usually approvable.
At 46% you'd have $3,610 a month for everything else — food, childcare, transport, retirement and any emergency. The lender's ratios use gross income and ignore maintenance entirely, which is why an approval can be comfortably above what your actual budget tolerates. Dropping to a $382,500 home would bring this to 39%.
You'd have $18,000 left, covering 4.2 months of housing and debt payments. New homeowners face immediate costs the inspection didn't catch — a water heater, an HVAC repair, a roof. Arriving at closing with nothing in reserve is the most common avoidable mistake in home buying, and it turns the first surprise into credit card debt at 24%.
No PMI, strong reserves, housing under a third of take-home — what 'comfortable' looks like.
Affordability verdict
Comfortable
The full cost of this home is $2,688 a month once you include $317 of maintenance, which no lender counts and most buyers forget. That's 31% of your $8,600 take-home pay and 20% of gross income. Your back-end debt-to-income ratio is 22%, comfortably within lending guidelines.
That's the test worth running — not whether you can afford it in a good year, but whether it holds in a bad one. At 39% you'd still be inside a workable range, which is the single strongest argument in favour of this purchase.
Even when a purchase is affordable, it isn't automatically better. Transaction costs of roughly 8–10% combined need years and appreciation to recover — if there's a real chance you move within five years, renting is often the stronger financial choice.
Rent vs buy comparisonLow down payment, minimal reserves and paused retirement saving — the house-poor profile.
Affordability verdict
High risk
The full cost of this home is $4,720 a month once you include $433 of maintenance, which no lender counts and most buyers forget. That's 66% of your $7,100 take-home pay and 45% of gross income. Your back-end debt-to-income ratio is 54%, which exceeds the 43% most lenders cap at.
At 66% you'd have $1,480 a month for everything else — food, childcare, transport, retirement and any emergency. The lender's ratios use gross income and ignore maintenance entirely, which is why an approval can be comfortably above what your actual budget tolerates. Dropping to a $442,000 home would bring this to 57%.
You'd have $4,000 left, covering 0.7 months of housing and debt payments. New homeowners face immediate costs the inspection didn't catch — a water heater, an HVAC repair, a roof. Arriving at closing with nothing in reserve is the most common avoidable mistake in home buying, and it turns the first surprise into credit card debt at 24%.
A lender is answering one question: will you repay this loan? That is narrower than whether the purchase leaves you able to fund retirement, absorb a job loss and replace a roof.
Lender ratios use gross income, ignore childcare and commuting entirely, and never include maintenance — which runs around 1% of home value a year. That is why an approved amount routinely sits 20–30% above what a household's actual budget tolerates comfortably, and why buyers who purchase at their maximum are reliably the ones who stop contributing to retirement.
A mortgage lasts 30 years. Your income will not be flat for all of them — hours get cut, bonuses disappear, one earner takes time out, industries contract.
The useful test is not whether the payment works today but whether it survives a 20% income reduction. If housing would consume more than about 45% of reduced take-home pay, the purchase depends on nothing going wrong for three decades. Reserves are what convert that scenario from a crisis into an inconvenience, which is why months-of-reserve matters as much as the ratio itself.
Maintenance at 1% of home value annually is the largest omission in standard affordability math — $4,500 a year on a $450,000 home, and higher on older properties. It is not optional; deferred maintenance simply arrives later and larger.
The tool also checks whether the purchase requires reducing retirement contributions. That trade is almost always a bad one: you are exchanging decades of compounding for equity that cannot be spent without selling or borrowing. If a house can only be afforded by pausing retirement saving, the correct conclusion is that the house is too expensive.
It excludes taxes, insurance, PMI and maintenance — commonly 35–45% on top.
Lender ratios ignore childcare, commuting, retirement saving and maintenance entirely.
A bigger down payment with no reserves makes the first repair a credit card balance.
One percent of home value a year — $4,500 on a $450,000 home. It arrives whether budgeted or not.
A mortgage lasts 30 years. Model a 20% income drop before signing.
Model the full cost including maintenance at 1% of home value annually, then check it against take-home pay rather than gross income. Under 28% of take-home is comfortable; above 40% is where 'house poor' begins. Then stress-test it: if your income dropped 20%, would the payment still work?
Spending so much on housing that little remains for saving, emergencies or discretionary spending. Practically it means housing above roughly 40% of take-home pay. People in this position typically stop contributing to retirement and carry credit card balances through minor emergencies.
At least three months of total obligations, and six is better. New homeowners face immediate costs the inspection missed — a water heater, HVAC repair or roof problem. Arriving at closing with nothing in reserve turns the first surprise into high-interest debt.
Usually yes. PMI at roughly 0.55% of the loan annually is a real cost, but draining reserves to avoid it is worse — you trade a manageable monthly expense for the risk that any surprise becomes 24% credit card debt. Put down enough to qualify comfortably and keep your emergency fund intact.
It's a warning sign rather than a strategy. You'd be trading decades of compounding for equity you can't spend without selling or borrowing. If a purchase only works by pausing retirement saving, that's strong evidence the price is too high rather than the contribution being optional.
Most lenders cap the back-end ratio near 43%, with the conventional guideline at 36%. But approval is a ceiling, not a recommendation — those ratios use gross income and exclude childcare, commuting and maintenance entirely.
The next calculations that usually follow this one.
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