Student Loan vs Mortgage Calculator

Decide whether to pay off student loans before buying a home. See DTI impact, buying power difference, and which strategy builds more wealth over 10 years.

Student Loan vs Mortgage Calculator

Should you pay off student loans before buying a home? Enter your numbers to see the impact on your buying power and monthly budget.

$
%
$
$
$
$
%
DTI With Student Loans
37.5%
High DTI — harder to qualify
Max Home (With Loans)
$410,179
Based on 43% DTI limit
Max Home (After Payoff)
$468,767
+$58,588 more buying power
Total Monthly (Buy Now)
$2,456
Mortgage + student loan

How long until you can buy in each strategy?

%
$
Strategy A: Pay Off Loans First
9 yrs 2 mo
Pay off loans in 120 months, then save down payment faster
Strategy B: Buy Now
Eligible Now
You qualify at current home price
Months to Pay Off Loans
120 months
At $380/mo on $35,000 balance
Down Payment Gap
$40,000
Need 20.0% of $350,000 = $70,000

Which path builds more wealth over 10 years? Home equity comparison between strategies.

%
%
Buy Now: Equity at Year 10
$220,746
Home value minus remaining mortgage balance
Pay Off First: Equity at Year 10
$59,015
Shorter time in home, larger down payment
Advantage
Buy Now wins
By $161,732 at year 10
Buy Now Total Monthly
$2,456
Mortgage + student loan combined
Note: "Buy Now" wins when home appreciation exceeds student loan interest rate. At 3.5% appreciation vs 5.5% loan rate, paying off loans first may be better — but local market conditions matter significantly.

How to Use This Student Loan vs Mortgage Calculator

Enter your student loan details, income, and home buying goals to see a complete analysis of both strategies: paying off loans first versus buying now while carrying student debt.

Student Loan Inputs

Enter your total remaining balance, current interest rate, and required monthly payment. If you have multiple loans, use the combined totals. Your monthly payment is the key figure for DTI calculation — it's what lenders actually count against you.

Income and Home Price

Use your gross annual income (before taxes). Lenders qualify you based on gross income, not take-home pay. The home price and your current down payment savings determine how close you are to your goal in each scenario.

Advanced: Income-Driven Repayment

If you're on SAVE, IBR, PAYE, or another IDR plan, enter your actual IDR payment. FHA lenders use your real IDR payment — which can dramatically lower your effective DTI and unlock qualification you wouldn't otherwise have.

Student Loan Impact Formula

DTI = (Student Loan Payment + All Other Debts + Mortgage Payment) ÷ Gross Monthly Income

Max Mortgage Payment = (Gross Monthly Income × 0.43) − Student Loan Payment − Other Debts

Max Loan Amount = Max Mortgage Payment × [(1+r)^n − 1] ÷ [r × (1+r)^n]

Home Price Reduction = Max Home (No Loans) − Max Home (With Loans)

Months to Pay Off = −ln(1 − Balance × r ÷ Payment) ÷ ln(1 + r)

Example: $85,000 income, $380/month student loan, $6.75% mortgage rate. Without loans: max home $485,000. With loans: max home $400,000 — a $85,000 reduction in buying power. Eliminating the $380/month payment at 6.75% adds approximately $57,000 in loan capacity.

Example: The Chen Family Decision

Sarah Chen: $42,000 in student loans, wants to buy a $380,000 home

Student Loan Balance$42,000 at 5.5%
Monthly Payment$455/month
Annual Income$95,000
Down Payment Saved$40,000
Target Home Price$380,000
DTI With Loans38% (tight but qualifiable)
Max Home With Loans$362,000 (below target)
Max Home Without Loans$430,000
Months to Pay Off Loans~110 months (9 years)

Sarah's analysis: She switched to SAVE plan ($185/month IDR payment), improving DTI to 32% and qualifying for her target home. She saves $270/month that goes toward the down payment, buying 14 months earlier than if she tried to pay off loans first. Because her loan rate (5.5%) is below her mortgage rate (6.75%), paying minimums on the loan and buying sooner is the mathematically optimal strategy.

Frequently Asked Questions

Student loan payments are counted in your back-end DTI ratio, which most lenders cap at 43-50%. Each $100 in monthly student loan debt reduces your qualifying mortgage payment by $100 — at 6.75%, that eliminates about $15,000 of home price. A $400/month student loan on an $85,000 income typically reduces your maximum home price by $60,000-$80,000.
It depends on three factors: (1) Loan rate vs. home appreciation — if your student loan rate is 4% and homes appreciate 5%, buying sooner wins mathematically. (2) DTI — if your loans push you above qualifying ratios, you must either pay off loans, get a lower-priced home, or switch to IDR. (3) Loan forgiveness — if you qualify for PSLF, never pay off early.
FHA lenders must use your actual IDR payment for DTI calculation — not 1% of your balance. If you switch from $455/month standard to $180/month IDR, your effective monthly debt for qualifying drops by $275. This can unlock $40,000+ in additional home price. The catch: conventional lenders usually use 0.5-1% of balance regardless, so FHA is the better program for heavy student loan borrowers.
PSLF (Public Service Loan Forgiveness) cancels remaining federal loan balances after 120 qualifying payments (10 years) of IDR payments while working for government or nonprofit. If you have 3 years left on PSLF, paying off your loans early means forfeiting potentially $30,000-$80,000 in tax-free forgiveness. Instead, pay IDR minimums and use the savings for your down payment — best of both worlds.
The general framework: (1) If on PSLF track, pay IDR minimums and buy now. (2) If loan rate is below mortgage rate, pay minimums and buy sooner. (3) If loan rate is above mortgage rate AND you're above DTI limits, aggressively pay down loans. (4) Consider IDR to improve qualifying DTI without paying off the full balance. There's rarely a single right answer — run the numbers for your specific situation.

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