Home Affordability Calculator
How much house can you afford? Enter your income, debts, and down payment — we apply the same 28/36 debt-to-income rule lenders use.
- Max home price$344,536.16
- Max loan amount$284,536.16
- Monthly housing budget$2,333.33
- Principal & interest$1,798.46
- Property tax$315.82
- Homeowners insurance$100.49
The 28/36 rule: lenders generally want housing costs at or below 28% of gross monthly income, and all debts at or below 36%. Your binding limit here is whichever is lower.
What the 28/36 rule means
With $100,000 of annual income ($8,333.33/month), lenders typically cap housing costs at $2,333.33/month and total debt payments at $3,000.00/month. Your $500.00/month in existing debts tightens the total-debt side of that rule.
Remember: "maximum affordable" isn't "comfortable." Taxes, insurance, maintenance, and HOA dues all ride on top of principal and interest — this calculator includes tax and insurance estimates, but maintenance (often ~1% of home value per year) is on you.
How the math works
Lenders don't ask "what can you pay?" — they ask "what share of your income is already spoken for?" The 28/36 rule gives two ceilings. The front-end ratio caps your housing cost (principal, interest, tax, insurance — PITI) at 28% of gross monthly income. The back-end ratio caps housing plus all other monthly debts (car loans, student loans, minimum credit card payments) at 36%.
The calculator works backward from those ceilings. First it computes both limits: 28% of your monthly income, and 36% of your monthly income minus your other debts. Whichever is smaller is your binding housing budget. Then it subtracts property tax and insurance to find how much is left for principal & interest, divides by the loan payment factor (the monthly payment per $1 borrowed at your rate and term) to get the maximum loan, and adds your down payment to reach the maximum home price.
Why each input matters: income sets both ceilings at once; monthly debts eat directly into the back-end limit — $500 in debts removes $500 from your housing budget; the down payment raises the price you can cover dollar for dollar and, at 20%, removes PMI from the payment entirely; and the rate changes the payment factor, so the same income buys noticeably less house at 7.5% than at 6.5%.
Worked example
Take a household earning $120,000/year ($10,000/month) with $500/month in other debts, buying with 20% down at 6.5% for 30 years. The front-end ceiling is 28% of $10,000 = $2,800/month. The back-end ceiling is 36% of $10,000 minus $500 = $3,100. The smaller number binds: your housing budget is $2,800. After property tax (1.1%) and insurance ($1,800/year), that supports a loan of about $354,918 — plus the 20% down payment, that's a maximum home price around $443,647.
Notice the binding constraint is the front-end ratio here. If those debts were $1,200/month instead of $500, the back-end would bind at $2,400 — and the max price would drop by more than $60,000.
What to watch for
- Kill debts before you house-hunt. Every $500/month of debt you eliminate buys back roughly $84,000 of home price at 6.5%. Paying off a car loan is often the highest-return move a buyer can make.
- The ceiling moves with rates. A one-point rate swing changes the payment factor enough to move your max price by tens of thousands. Re-run this calculator with today's rate, not the rate from three months ago.
- Budget past the ratio. The 28/36 rule ignores maintenance (plan ~1% of the home's value per year), utilities, and furnishings. A payment that fits the ratio can still feel tight in real life.
- Save closing costs separately. You'll need another 2–5% of the price in cash at closing, on top of the down payment. A $443,000 purchase can mean $15,000+ in closing costs alone.
- Pre-approval is not the finish line. Lenders re-verify income, debts, and credit before closing. Don't open new credit or make big purchases between pre-approval and closing day.
Frequently asked questions
What is the 28/36 rule?
It's the guideline most mortgage lenders use: housing costs (PITI) should be at or below 28% of gross monthly income, and all monthly debts combined at or below 36%. This calculator finds the highest home price satisfying both limits.
Should I buy the maximum I can afford?
Not necessarily. The 28/36 rule is a lender's ceiling, not a comfort target. Maintenance (~1% of home value per year), utilities, and lifestyle costs aren't in the ratio — many buyers are happier below the max.
How do debts affect how much house I can afford?
Car loans, student loans, and minimum credit card payments count against the 36% total-debt limit. Paying down debts is often the fastest way to raise the home price you qualify for.
Does the down payment change affordability?
Yes, two ways: a bigger down payment directly raises the price you can cover, and reaching 20% down eliminates PMI, which lowers the monthly payment on any given price.
Why does my pre-approval say more than this calculator?
Many lenders stretch beyond 28/36 — back-end ratios of 43–50% are common in automated underwriting for strong borrowers. The calculator uses the conservative guideline; your lender may approve more, but that doesn't mean the payment will feel comfortable.
Do bonuses or overtime count as income?
Sometimes. Lenders typically average variable income over two years and want to see it continuing — a single good year usually isn't enough. Self-employment income gets similar scrutiny, often with a two-year average of net (not gross) earnings.
How does an HOA affect how much house I can afford?
HOA dues count as part of your housing cost in the 28% ratio, dollar for dollar. A $400/month HOA has the same effect on your max price as a $400/month car payment does on the back-end ratio — on a 6.5% 30-year loan it cuts roughly $67,000 of buying power.
Should my partner's income be included?
Only if they're also on the loan — and then all of their debts count too. A partner's income with heavy debts can actually lower what you qualify for versus applying solo, so run it both ways before you decide.