🏡 Home Affordability Calculator
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How Much House Can You Actually Afford?
Buying a home is exciting—but it’s easy to fall in love with a house that stretches your budget too thin. Lenders use a simple guideline called the 28/36 rule to determine what you can comfortably afford. This calculator applies that rule to your specific numbers, giving you a realistic maximum home price based on your income, debts, and local costs.
What Is the 28/36 Rule?
- 28% Front-End Ratio: Your total monthly housing payment (principal, interest, taxes, insurance, and PMI if applicable) should not exceed 28% of your gross monthly income.
- 36% Back-End Ratio: Your total monthly debt payments (housing + car loans + student loans + credit cards) should not exceed 36% of your gross monthly income.
If your numbers fall within these ranges, you’re in a strong position to qualify for a mortgage. If not, the calculator will show you the gap—so you can adjust your expectations, save a larger down payment, or pay down existing debt.
How to Use This Calculator
- Annual Gross Income: Your total household income before taxes. Include salary, bonuses, and any consistent side income.
- Monthly Debt Payments: Minimum payments on car loans, student loans, credit cards, and any other recurring debts. Do not include current rent.
- Down Payment: Cash you plan to put toward the home purchase. A 20% down payment avoids PMI, but many loans allow as little as 3–5% down.
- Interest Rate: The annual mortgage rate you expect to qualify for. Shop around—rates vary by lender and credit score.
- Loan Term: 30 years is standard for lower payments; 15 years saves interest but requires higher monthly payments.
- Property Tax & Insurance: Enter your local estimates. A common rule of thumb is 1–2% of home value for annual property tax, and $800–$1,500 for insurance.
- Lawyer / Closing Fees: Typically 1–3% of the home price. These are paid at closing and reduce the cash available for your down payment.
- Other Fees: Inspections, moving costs, or any other upfront expenses you expect to pay.
📌 Pro Tip: The calculator includes PMI (Private Mortgage Insurance) if your down payment is less than 20% of the home price. PMI typically costs 0.5%–1% of the loan amount annually and is added to your monthly payment.
What If the Number Is Lower Than You Expected?
Don’t be discouraged. This is a conservative, lender-friendly estimate. Here are a few levers you can pull to increase your buying power:
- Pay down high-interest debt to lower your back-end DTI ratio.
- Increase your down payment to reduce the loan amount and potentially eliminate PMI.
- Improve your credit score to qualify for a lower interest rate.
- Consider a less expensive area or a smaller home to start building equity.
Frequently Asked Questions
Does this calculator include HOA fees?
No. If you’re buying a condo or home in a planned community, HOA dues will increase your monthly housing cost. Add your estimated HOA fee to the monthly debt input for a more accurate picture.
What if I have a co-borrower?
Combine both incomes and both monthly debt payments, then enter the totals. Lenders consider the full household financial picture.
Is the 28/36 rule strict?
It’s a guideline, not a law. Some lenders allow higher DTIs (up to 43% or even 50% for well-qualified buyers). But staying within 28/36 keeps your payment comfortable and leaves room for life’s surprises.
Related Tools & Resources
- Mortgage Payment Calculator — Estimate your full PITI payment once you have a price in mind.
- Credit Card Payoff Calculator — Pay down debt to improve your DTI.
- 15-Year vs. 30-Year Mortgage: How to Choose — Full guide.
Disclaimer: This calculator provides estimates for educational purposes. It does not constitute mortgage pre-approval. Consult a licensed lender for actual qualification amounts.