I · Calculators · Tax Foundation 2024 effective property tax rates by state · BLS Consumer Expenditure Survey 2023 (HOI baseline) · Federal Reserve H.15 (current 30Y APR reference) · IRS 2025 federal brackets + state DOR 2025 schedules (DCEngine) Last synced 2026-05-04

Mortgage Affordability Calculator — by State (DTI + Property Tax + Insurance)

Two layers competitors skip: (1) <strong>state-aware after-tax income</strong> — Bankrate/Zillow run DTI on gross, but a $200K Cal earner has 22% less monthly cash than a $200K Texan, so the 36% back-end DTI threshold should anchor on net not gross, (2) <strong>per-state effective property tax + insurance</strong> from CoreLogic + IRDA aggregations — New Jersey at 2.23% effective vs Hawaii 0.32% means the same gross income supports a 22% smaller / larger house respectively. We size both and show side-by-side.

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Front-end (28% rule): max_PITI = 0.28 × monthly_gross. Back-end (36% rule, debt-aware): max_PITI = 0.36 × monthly_gross − monthly_debts. We additionally compute a real-DTI using your post-tax monthly take-home (state-aware via DCEngine) under a 43% net-DTI test — the binding constraint for many high-tax-state borrowers. PITI back-solved: P = mortgage(price − down, rate, term); I = price × state_property_tax_rate / 12; HOI = price × 0.0035 / 12 (national avg, FL/LA shifted to 0.0070; CA wildfire counties +25%). MI added when down <20%. The calculator solves for max home price by inverting all four components against the binding DTI rule.

Reader questions 9 questions answered
What's the 28/36 rule?
Two underwriting thresholds Fannie Mae and most conventional lenders use. 28% (front-end): your monthly housing cost (PITI = principal + interest + property tax + homeowners insurance, plus HOA/MI when applicable) shouldn't exceed 28% of your gross monthly income. 36% (back-end): PITI + all other monthly debt (auto loans, student loans, credit cards, child support) shouldn't exceed 36% of gross. Some lenders push back-end to 43% or 50% (FHA, Freddie LP). The 28/36 numbers are guidelines, not laws — you can sometimes be approved above them with strong reserves or a co-signer.
Why does state matter so much?
Two reasons. (1) Property tax ranges from Hawaii's 0.32% effective rate to New Jersey's 2.23% — a 7× spread. On a $500K house that's $1,600/yr in Hawaii vs $11,150/yr in NJ, or about $800/month difference. (2) State income tax shifts your post-tax cash. A $150K W-2 earner takes home about $113K in Texas (no state tax) vs $99K in California (9.3% marginal) — same gross, $14K less to service mortgage debt. Tools that ignore state report identical 'affordability' for both, which is wrong by a factor of 15–20%.
How is property tax calculated?
Property tax = assessed_value × effective_rate. Most states assess at 80–100% of market value (we assume 100% for affordability — a small overestimate that's offset by tax-exempt portions like homestead). Effective rate is the published per-county or per-state figure (Tax Foundation). California has a special case: Prop 13 caps annual assessment growth at 2%, so long-term owners pay far less than newcomers — but for a fresh purchase, you reset to market value. For Texas, school-district taxes are folded into the effective rate — Travis County's 1.94% is mostly school funding.
Should I use the 28% or the back-end DTI rule?
Both — the binding rule is whichever is lower. If you have $0 in non-mortgage debt, the 28% front-end caps you. If you have $1,500/month in debt, the 36% back-end usually caps you (you can spend at most 36% − debt-as-pct-of-income on PITI). Lenders also run a 43% "qualified mortgage" back-end as a separate test under CFPB rules. Practically, anyone with student loans, an auto payment, or significant CC balance hits the back-end rule first. Our calculator computes both and shows the binding one.
Does this account for HOA or condo fees?
Yes — there's an input for monthly HOA. HOA is included in the front-end DTI test by Fannie/Freddie underwriting. National median HOA is $370/month for condos and $250 for SFH (Foundation Communities 2024). High-rise downtown condos can exceed $1,000. HOA is the most-overlooked DTI killer — a $400 HOA cuts your max home price by ~$70K at 7% APR.
Is mortgage insurance (PMI/MI) included?
Yes — if your down payment is below 20%, we add MI at 0.5% of loan balance annually (the median for 700+ FICO). MI ranges 0.3–1.5% depending on credit score and LTV. FHA loans use MIP instead, currently 0.55% annually + a 1.75% upfront premium. PMI on conventional loans terminates automatically at 78% LTV (HPA 1998); MIP on FHA loans is permanent for the life of the loan if your initial LTV exceeded 90% — a meaningful long-run cost difference.
How are PITI, DTI, and LTV related?
LTV (loan-to-value) is loan / home price — controls whether you need MI and what rate you get. PITI is your monthly housing cost — controls front-end DTI. DTI is monthly debt / monthly gross — controls qualification. They interact: a higher down payment lowers loan size → lower LTV → no MI → lower P, lower PITI → lower DTI. Conversely, a 3% FHA loan locks in MI for life and pushes DTI right to the lender ceiling on the same house. There's no single optimal answer — the trade-off is liquidity vs monthly cash flow.
What APR should I use?
30Y conventional fixed-rate currently ~6.85% (Q1 2026 Federal Reserve H.15). Adjust for credit score: 760+ gets best, every 20 FICO points below adds about 0.125–0.25% to your rate. ARM (5/1, 7/1) starts 0.25–0.5% lower with reset risk. Rates change weekly; we surface a default but you should override with an actual quote from at least three lenders — they vary 0.25–0.5% across competitive shops on the same FICO and LTV.
Does 'real-DTI' mean something different here?
Yes — most calculators run DTI on gross monthly income because that's what underwriters use. We additionally compute a real-DTI using your post-tax monthly take-home (state-aware federal + state + FICA from DCEngine) under a 43% test. This is the constraint that actually predicts whether you can comfortably service the mortgage. A high-tax-state borrower (CA, NY, OR) often passes the 36% gross-DTI test but fails the 43% real-DTI — meaning they qualify for a house that strains their actual cash flow. Worth seeing both numbers.