Find Your Comfort Zone

Updated October 7, 2026. The default interest rate is Freddie Mac’s national average for the week of October 1, 2026, updated automatically each week.

Your comfort zone is the range of home prices whose full monthly payment fits your household budget, from a level that leaves room to breathe up to the most a lender is likely to approve. Answer four questions about your income, your debts, the cash you have and the home you want. The calculator shows a price range, what each end costs every month and where your cash goes, so you walk into your first open house and your first lender conversation already knowing your numbers.

Why does the calculator show a range instead of one number?

No calculator knows your credit score, your reserves or the loan program a lender will offer, so a single price would promise more precision than it has. The range shows two edges. The lower end is where the payment sits comfortably inside your budget. The upper end is close to the most a lender is likely to approve. Where you land inside it is a conversation with a qualified lender, and Neil can introduce you to three he trusts.

Why set your monthly payment before the first open house?

An open house is a hard place to do math. A South Bay buyer who walks in knowing their range can look at a $1.6 million home and a $1.9 million home and know which one fits before falling for either. Once you have your range, browse this weekend’s South Bay open houses with a price ceiling already in mind.

How does the calculator figure the range?

It adds your income and a co-buyer’s income, divides by 12 and applies two debt-to-income ratios. The lower end uses 36 percent and the upper end uses 45 percent. Both figures come from Fannie Mae’s Selling Guide, which caps total debt at 36 percent of stable monthly income for manually underwritten loans and allows up to 45 percent for borrowers who meet its credit score and reserve requirements. Loans run through Fannie Mae’s automated underwriting can go as high as 50 percent. Your existing monthly debts come out first, and what remains is the payment the home can carry.

Here is the arithmetic at the default figures. Two incomes totaling $200,000 a year come to about $16,667 a month. At 36 percent, $6,000 covers all debts, and after $500 in car and card payments, $5,500 a month is left for the home. At 45 percent, $7,000 is left.

Where does your cash go?

The calculator holds back part of your cash for closing costs first, 3 percent of the price by default, and puts the rest toward the down payment. Closing costs vary by loan and lender, so treat 3 percent as an estimate until a lender sends you a Loan Estimate, which lists them line by line. When the down payment falls under 20 percent of the price, mortgage insurance is added to the monthly payment.

What goes into the monthly payment?

• Principal and interest, from the loan amount, rate and term. The default rate is Freddie Mac’s 30-year average of 7.28 percent for the week of October 1, 2026, refreshed automatically each week. Your own rate depends on credit, loan size and points, so replace it once a lender quotes you.
• Property tax. In Los Angeles County the general tax levy is 1 percent of assessed value, and voter-approved bonds and direct assessments are added on top, so the total rate varies by parcel. The calculator starts at 1.2 percent as an estimate. The County’s property tax portal shows what each part of a bill covers.
• Homeowners insurance. The $200 a month default is a placeholder, not a quote. On the Palos Verdes Peninsula, fire zones change both the price and the carriers available, and our insurance guide walks through it.
• HOA dues, when you choose Condo or townhome. Enter the figure from the listing.
• Mortgage insurance, added only when the down payment is under 20 percent. The 0.5 percent a year default is an estimate, and your lender sets the actual rate.

When does a South Bay purchase need a jumbo loan?

Fannie Mae and Freddie Mac buy loans up to the conforming limit. For 2026 the Federal Housing Finance Agency set that limit at $1,249,125 for a one-unit home in Los Angeles County. A larger loan is a jumbo loan, with its own rates and down payment rules. The gauge marks the price where your loan would cross that line, and the calculator says so when the upper end goes past it.

For the bigger picture on budgets and neighborhoods, read What can I afford in the South Bay? and Buying your first home in the South Bay.

Buying, selling, or still working out whether the South Bay is where to set down roots? Neil Chhabria and the team will walk through your range with you. Reach out here.

Sources

• Freddie Mac, Primary Mortgage Market Survey, 30-year fixed average of 7.28 percent as of October 1, 2026. Checked automatically, most recently October 7, 2026.
• Fannie Mae Selling Guide, B3-6-02, Debt-to-Income Ratios. Verified October 7, 2026.
• Federal Housing Finance Agency, Conforming Loan Limit Values for 2026. Verified October 7, 2026.
• Los Angeles County Property Tax Portal, Annual Secured Property Tax Bill. Verified October 7, 2026.

Chhabria Real Estate Company is not a lender. This calculator is for education and planning and gives a range, not a loan offer, a pre-approval or financial advice. Results depend on the figures you enter and leave out costs a lender may add. A qualified lender will confirm what you qualify for.