How much home can you afford?
Affordability Calculator
See how much home you can afford in North Texas based on your income, debts, and down payment. Uses a conservative 43% back-end DTI guideline and city-specific Texas property tax rates.
Where these numbers come from
- Mortgage rate
- Freddie Mac Primary Mortgage Market Survey, cross-checked against Mortgage News Daily · as of July 2026
- Property tax
- Each county’s own published rate table, decomposed per taxing unit (school district, city, county, college, hospital) · as of 2025 tax year, verified July 2026
- Homestead exemption
- Texas Comptroller - Tax Code 11.13(b) $140,000 school-district exemption, plus each unit’s adopted local option · as of July 2026
- Mortgage insurance
- Enact published BPMI rate card, every cell corroborated against National MI’s · as of July 2025 card
- Homeowners insurance
- 0.90% of value a year, derived from observed DFW premiums across two aggregators. A hail-market estimate, not a quote - and it prices off purchase price rather than rebuild cost, which overstates it on land-heavy lots · as of March 2026
- Closing costs
- ~2% of price, reasoned from Texas custom rather than the national 3% rule: the seller customarily buys the owner’s title policy here and there is no state transfer tax · as of 2026
- DTI limits
- 43% back-end is the QM safe harbour and 28% front-end the conventional guideline. Automated underwriting routinely approves above 43%, so treat the maximum as a screen, not a ceiling · as of convention
Plano effective property tax: 1.71%
A lender advances the rest; a conservative 43% back-end DTI sets the ceiling here.
Car, student loans, credit cards, alimony. Use the minimum payment, not the balance. Deferred or income-driven student loans still count: many lenders use 0.5-1% of the balance rather than your actual $0 payment. Child care is not a debt and lenders do not count it, though your budget should.
Sets your PMI rate, which the card prices from 0.19% to 1.86% depending on this and your down payment. Only matters below 20% down.
Pre-filled from city; override if needed
Modeling the residence homestead exemption, applied per taxing unit.
Maximum home price (43% DTI)
$493,848
Conservative target (28% rule): $385,144
The residence homestead exemption saves about $167/mo here, applied per taxing unit - the school district’s $140,000 plus whatever local option each unit adopts. You have to file for it with the appraisal district; it is not automatic, and it does not transfer from the seller.
Cash you need at closing
That is $15,929on top of your down payment. Texas is cheaper here than most states - the seller customarily buys the owner’s title policy and there is no state transfer tax - but the escrow a lender funds on day one still lands in full. Your option fee, inspection, and appraisal are paid before closing and are not in this figure.
Note:
Property tax pre-fills from the selected city’s 2025 effective rate; insurance defaults to 0.90% of price (DFW hail market). Rates shown are July 2026benchmarks and move daily — your quote will differ. Lender approval depends on credit, employment history, and reserves. For a precise pre-approval, contact Mali for trusted lender introductions.
Frequently asked
How is the maximum home price calculated?
We use a 43% back-end DTI ratio. Your gross monthly income × 0.43 minus existing debts gives your total housing budget, including principal, interest, taxes, insurance, HOA, and PMI, and we back out the max purchase price that fits. Treat that as a conservative planning ceiling rather than a hard lender cap: 43% is the qualified-mortgage safe-harbor line, and real loan programs go higher with compensating factors like strong reserves or a high credit score - Fannie Mae’s automated underwriting will approve conventional loans up to about 50%, and FHA can stretch further still. Borrowing to the top of what a lender allows is a different question from what is comfortable to live with.
Why does the property tax change by city?
Texas effective property tax rates vary by city, county, and school district. For the 2025 tax year Plano runs about 1.71%, Frisco 1.68%, Prosper 1.95%, Garland 2.39% and Rowlett 2.51%. Collin County has no hospital district, which is why its suburbs sit well below their Dallas County neighbors. Picking your city pre-fills the right rate so the affordability number reflects reality. Note these exclude MUD, PID and MMD levies, which are parcel-specific and can add a point or more in newer master-planned developments.
What’s the conservative 28% rule?
The classic guideline says housing should consume no more than 28% of gross monthly income, separate from total debts. The conservative price is what you can comfortably afford without stretching, leaving room for retirement savings, kids, and unexpected costs.
Will the lender actually approve me at this number?
This is a planning estimate. Real approval depends on credit score, employment history, reserves, and the lender’s overlays. Mali introduces clients to vetted North Texas lenders for fast pre-approvals, with no obligation.
Prefer to reach out directly? Email Mali or call (972) 408-6939.