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House Affordability Calculator

Find out how much house you can afford using the 28/36 rule. Enter your income, debts, and loan details to see your maximum home price and monthly payment breakdown.

The 28/36 Rule

Max housing payment = Annual Income ÷ 12 × 0.28
Max total debt = Annual Income ÷ 12 × 0.36
Debt-adjusted max = Max total debt − Monthly debts

The 28/36 rule states that no more than 28% of gross monthly income should go toward housing costs, and no more than 36% toward total debt obligations. Lenders use this guideline to assess mortgage eligibility.

How to Use the House Affordability Calculator

  1. 1
    Enter Your Income & Debts
    Enter your gross annual income and all existing monthly debt payments (car loans, student loans, credit cards). These are used to apply the 28/36 rule.
  2. 2
    Add Your Down Payment
    Enter how much you have saved for a down payment. A larger down payment reduces your loan amount and monthly obligation.
  3. 3
    Set Loan & Tax Details
    Choose your desired loan term, expected interest rate, local property tax rate, and estimated annual home insurance cost.
  4. 4
    Review Your Affordability
    See your maximum home price, monthly payment, and DTI ratio. The comparison table shows affordability at multiple price points.

Example Calculation

Income $80,000/yr, monthly debts $400, down payment $40,000, 30-yr at 7%, property tax 1.2%, insurance $1,200/yr:

Max housing (28%) = $80,000 ÷ 12 × 0.28 = $1,867/mo
Debt-adjusted max = ($80,000 ÷ 12 × 0.36) − $400 = $2,000/mo
Limiting payment = $1,867/mo
Tax + insurance = ($X × 1.2% ÷ 12) + ($1,200 ÷ 12)
Max home price ≈ $265,000

Frequently Asked Questions

The 28/36 rule is a guideline used by lenders to assess mortgage affordability. It states that your monthly housing costs (mortgage principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income, and your total monthly debt payments should not exceed 36%. Most conventional lenders use this as a baseline for approval.

Most conventional lenders prefer a back-end debt-to-income ratio (total debts) of 36% or less. However, many lenders will approve loans up to 43–45% DTI, especially with compensating factors like a large down payment or strong credit score. FHA loans may allow up to 50% DTI in some cases.

A larger down payment reduces your loan amount, which lowers your monthly mortgage payment and allows you to afford a higher-priced home within the same income limits. Putting down 20% also eliminates the need for private mortgage insurance (PMI), which can save $100–$300/month. A bigger down payment may also qualify you for a lower interest rate.

DTI is the percentage of your gross monthly income that goes toward debt payments. The front-end DTI includes only housing costs, while back-end DTI includes all monthly debt obligations (housing + car loans + student loans + credit card minimums). Lenders use DTI to gauge how much additional debt you can responsibly handle.

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