Determining whether a monthly payment fits your budget is a very personal decision. However, lenders look at your debt to income ratio to determine the home price you can afford. A lender will analyze your current existing debt, your other monthly payments, and will determine what your highest mortgage payment can be. This high limit will determine what you are able to get a loan for. To determine your rations, first, look at your monthly gross income, before taxes and contributions. This is how much you make per month, not how much you take home. What you take home is net income.