Home Affordability Calculator

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Find out how much home you can afford using the 28/36 rule. Based on income, debts, down payment, and current rates.

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Maximum Home Price You Can Afford

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Max Monthly Payment$0
Loan Amount$0
DTI Ratio0%

📐 Formula

Max Housing Payment = Gross Monthly Income × 28%. Max Total Debt = Gross Monthly Income × 36%. Loan = MaxPayment / Monthly Rate Factor

How to Use the Home Affordability Calculator

1

Enter your gross annual income

Input your total pre-tax household income from all sources. Include both partners' incomes if buying jointly. Lenders use gross income for qualification, not net take-home.

2

Enter monthly debt payments

Include all minimum monthly obligations: car loans, student loans, credit card minimums, personal loans. Do not include rent — it will be replaced by the mortgage payment.

3

Enter down payment and rate

The down payment reduces the loan amount and eliminates PMI if it reaches 20%. The interest rate directly determines monthly payment — use a current rate quote rather than an estimate.

4

Review the 28/36 rule output

28% is the maximum share of gross income recommended for housing costs (PITI). 36% is the maximum total debt-to-income ratio including all debts. Most conventional lenders allow up to 43–45% DTI with strong compensating factors.

How Much House Can You Actually Afford?

Lender qualification and actual affordability are not the same thing. A lender may approve a mortgage that leaves you house-poor — technically qualifying on paper but with no margin for savings, emergencies, or lifestyle expenses. The maximum loan amount a lender offers is a ceiling, not a recommendation. A more conservative framework: keep total housing costs (mortgage, tax, insurance, HOA, maintenance) below 25–28% of net take-home pay rather than 28% of gross income.

The difference is material. A household earning $90,000 gross ($72,000 net after tax and FICA) using 28% of gross could qualify for $2,100/month in housing costs. Using 28% of net yields $1,680/month — a $420/month difference, or approximately $80,000 less in maximum purchase price at 7% rates. The net income approach leaves significantly more financial cushion.

The Hidden Costs New Buyers Underestimate

First-time buyers routinely underestimate the true cost of homeownership. Beyond the mortgage payment: property tax (average 1.1% of home value annually, or $440/month on a $480,000 home); homeowner's insurance ($1,500–$3,000/year depending on location and coverage); PMI if down payment is below 20% (0.5–1.5% of loan amount annually, or $200–$600/month on a $400,000 loan); and maintenance (budget 1–2% of home value annually for ongoing repairs, replacement, and improvements — $4,800–$9,600/year on a $480,000 home). These four costs routinely add $1,000–$2,000/month above the principal-and-interest payment shown on mortgage calculators.

Down Payment: Impact Beyond the Loan Size

A 20% down payment eliminates PMI and reduces the loan amount, but the opportunity cost of tying up that capital matters too. At current savings rates (4–5% HYSA) and historical equity returns (7–10% annually), the return on a larger down payment versus investing the difference depends on your mortgage rate. If your rate is 7% and you can earn 9% investing the same capital, a smaller down payment may be financially superior — the math changes with every rate environment. Use the mortgage calculator alongside this affordability tool to model total cost scenarios.

Sources & Methodology

Calculations are based on the most current publicly available data from authoritative government and industry sources:

Frequently Asked Questions

The 28% rule limits housing costs (mortgage, tax, insurance) to 28% of gross monthly income. The 36% rule limits total debt payments (housing + car + student loans) to 36%. Lenders use these as qualifying guidelines.
Conventional loans typically require 5–20% down. FHA loans allow as little as 3.5% with a 580+ credit score. Putting 20% down avoids Private Mortgage Insurance (PMI), which adds 0.5–1.5% annually.
For conventional loans: 620 minimum, 740+ for best rates. FHA loans: 580 for 3.5% down. VA loans: no minimum (but lenders typically want 620+). A higher credit score saves tens of thousands over a 30-year mortgage.
Using the 28/36 rule: 28% of $80,000 gross annual income = $22,400/year = $1,867/month for PITI. At 7% over 30 years, this supports a loan of approximately $280,000. With 10% down: home price around $311,000. With 20% down: $350,000. Factor in property taxes, HOA fees, and insurance — they reduce the loan amount you can support.
The 28/36 rule states: spend no more than 28% of gross monthly income on housing (PITI — principal, interest, taxes, insurance), and no more than 36% on all debt combined (housing + car + student loans + credit cards). Lenders may approve up to 43–50% DTI, but staying closer to 36% provides a financial safety buffer.