House Affordability Calculator
How much house can you afford? Uses the 28/36 rule and your income, debts, down payment, and rate to show your max purchase price.
What is House Affordability Calculator?
The house affordability calculator applies the standard 28/36 rule: your monthly housing payment should be no more than 28% of gross income, and total debts (housing + other) no more than 36%. From those caps and your inputs, it backs out the maximum home price.
Formula
28% rule: max housing = gross income × 0.28.
36% rule: max total debt = gross income × 0.36.
The binding limit is the smaller of: (28% of income) or (36% − other debts).
Given the max housing payment, subtract taxes/insurance/HOA, then back-solve the standard amortization formula for the maximum loan amount. Add down payment to get max home price.
Worked example
$8,000/mo income, $500 debts, $50k down, 6.75% rate, 30 years, $400/mo tax+ins:
- 28% of income: $2,240
- 36% − $500 debts: $2,380
- Binding: $2,240/mo housing
- Minus taxes/ins: $1,840/mo P&I
- Max loan @ 6.75% 30yr: ~$283,860
- Max home price: ~$333,860
How to use this calculator
- Enter your gross (pre-tax) monthly income.
- Add up all minimum monthly payments on non-mortgage debts (car, student, credit card minimums).
- Enter your down payment, rate, and term.
- Estimate property taxes + insurance + HOA — typically $300-700/mo.
Frequently asked questions
Should I really stop at 28%?
It's a guideline, not a law. Many lenders approve up to 43% DTI (debt-to-income). But comfortable budgets work better at 25-30% — leaves room for emergencies, retirement savings, and quality of life.
What's a DTI ratio?
Debt-to-income. Front-end = housing/income. Back-end = (housing + other debts)/income. Most conventional lenders cap back-end at 43-50%.
Does this include PMI?
If you put less than 20% down, PMI typically adds 0.3-1.5% of the loan annually. Add this to taxes/ins. We don't include it automatically because it varies by credit and loan type.
Is the 28/36 rule outdated?
It's conservative for today's debt levels but still defensible. With high housing costs in many markets, real DTIs run higher. The rule remains a useful warning sign — above 36% back-end you have less flexibility.