House Affordability
Find out how much home you can afford based on your income, debts, and the 28/36 rule.
The House Affordability Calculator uses the 28/36 rule—a lending standard—to estimate the maximum home price you can afford based on income and existing debts. Use this to set a realistic budget before house hunting and understand your borrowing capacity.
Examples
Household Income of $95,000/Year
Dual Income of $140,000 with Student Loans
Frequently Asked Questions
What is the 28/36 rule?
Does this include closing costs?
Quick Tips
- •The 28/36 rule is a guideline, not a hard cap. Some lenders will approve higher DTI for strong credit profiles.
- •Consider your lifestyle beyond the maximum. Just because you can afford a price doesn't mean it's comfortable—leave room for savings and unexpected expenses.
- •Don't max out your affordable price. Lenders will approve based on income, but life changes (job loss, medical emergency) can create hardship.
- •Factor in non-mortgage housing costs: property taxes, insurance, HOA, maintenance (budget 1% of home value annually).
- •Get pre-approved before house hunting. This gives you a clear budget and makes offers more competitive.
The House Affordability Calculator uses the 28/36 rule—a lending standard—to estimate the maximum home price you can afford based on income and existing debts. Use this to set a realistic budget before house hunting and understand your borrowing capacity.
How to Use This Calculator
Enter your gross monthly income, monthly debt payments, and down payment. The calculator uses the 28/36 rule (housing cost no more than 28% of income, total debt no more than 36%) to estimate the maximum home price you can afford. Adjust interest rate and term to explore different scenarios.
Understanding the Formula
Uses the 28/36 rule: Housing costs should not exceed 28% of income, and total debt (housing + other) should not exceed 36%.
Examples
Household Income of $95,000/Year
With a $95,000 annual income, $400/month in existing debts, a 6.5% mortgage rate, and 20% down payment, the 28/36 rule suggests a maximum housing payment of $2,217/month. This translates to an affordable home price of approximately $385,000 with a $77,000 down payment.
Dual Income of $140,000 with Student Loans
A couple earning $140,000/year has $850/month in student loan payments. Using the 28% front-end ratio, their maximum housing cost is $3,267/month. However, the 36% back-end limit caps total debt payments at $4,200, leaving $3,350 for housing. At 6.75% with 10% down, they can afford a home up to about $480,000.
Frequently Asked Questions
What is the 28/36 rule?
A common mortgage guideline stating housing costs should be ≤28% of gross income, and total debt ≤36%.
Does this include closing costs?
No, closing costs (usually 2-5% of purchase price) are paid upfront in addition to the down payment.
Assumptions & Limitations
- The 28/36 rule is a guideline; actual lender requirements vary. Some lenders allow up to 43% back-end DTI.
- Income is gross monthly income; actual qualifying income for mortgages may be adjusted by lenders.
- Interest rate is fixed; actual rates depend on credit score, market conditions, and lender.
- Does not include property taxes, insurance, HOA fees, or maintenance costs in affordability calculation.
- Assumes a 20% down payment for DTI calculations; actual down payments vary and affect PMI costs.