There are two answers and they are rarely close.
Answer one: what a lender will approve
Based on debt-to-income. Total monthly debts including the new housing payment, divided by gross monthly income, capped commonly at 43–50%.
$140,000 household income is $11,667 gross monthly. At 43% DTI that is $5,017 for all debt. Subtract $750 in car and student loans and $4,267 remains for the full housing payment.
At 6.5% with 10% down and typical taxes and insurance, that supports roughly a $610,000 purchase.
Answer two: what actually fits
DTI uses gross income. You do not spend gross income.
On $140,000, after federal and state tax, FICA and a 10% retirement contribution, take-home might be around $7,900 a month.
A $4,267 housing payment is 54% of actual take-home — before utilities, maintenance, childcare or saving anything further.
Costs DTI ignores entirely:
- Childcare — frequently exceeds a mortgage payment
- Retirement contributions
- Maintenance — budget roughly 1% of value annually
- Utilities, which usually rise on moving from a flat to a house
- Furnishing a larger space
- Commuting changes
A more honest framework
Work from take-home, not gross:
- Comfortable — housing at 25% or less of take-home
- Reasonable — 25–33%
- Stretched — 33–40%
- Tight — above 40%
On $7,900 take-home, “reasonable” is $1,975–2,600 — supporting roughly $330,000–430,000, against an approval of $610,000.
That gap is not the lender being reckless. It is the difference between what can be verified and what a life actually costs.
Where the truth sits
Somewhere between, depending on:
- Stability — secure salaried income supports more stretch than variable commission
- Trajectory — early career with rising income differs from a plateau
- Reserves — six months of expenses changes the risk profile entirely
- Other goals — a house that prevents retirement saving is expensive in ways the payment does not show
The practical exercise
Pick a target payment. Then, for three months, transfer the difference between your current rent and that payment into a separate account you do not touch.
If it is painless, the number is right. If it is not, you have learned that cheaply rather than expensively.
The affordability calculator lets you drag the DTI ceiling down and see what a comfortable payment actually buys.
Common questions
DTI uses gross income and excludes childcare, retirement contributions, tax withholding and maintenance. Approval reflects verifiable obligations, not your actual budget.
Many people find 36% or below comfortable. 43% is the common approval ceiling. Above that, housing dominates the budget.
General information, not advice on your specific situation. Guidelines, limits and pricing change, and vary by lender, programme and state. Nothing here is a commitment to lend or an offer of credit. For tax or legal questions, consult a qualified professional.
Sree Basireddy · Mortgage Loan Officer, NMLS 2705737 · Loan Factory, Inc., NMLS 320841 · Equal Housing Opportunity