How much house can you afford?
This calculator estimates the most expensive home you can afford from your gross income, your other monthly debt payments and the down payment you have saved. It applies the debt-to-income limits lenders use, best known as the 28/36 rule, and includes property tax, insurance and HOA fees in the monthly payment, not just principal and interest.
The 28/36 rule
Most conventional lenders want your total housing payment to stay under about 28% of your gross monthly income, the front-end ratio, and all your monthly debt payments together, housing included, under about 36%, the back-end ratio. Whichever limit is lower sets your budget. The calculator tells you which one applies to you.
An example
On a 100,000 dollar salary with 400 dollars of monthly debts, a 50,000 dollar down payment and a 6.5% rate, the 28% limit allows about 2,333 dollars a month for housing. After property tax and insurance, that supports a home of about 349,000 dollars. Two changes show how sensitive the figure is:
- With 1,200 dollars of monthly debts instead of 400, the 36% limit takes over and the budget falls to about 275,000 dollars. Paying off a car loan can matter more than a raise.
- At a 5.5% rate instead of 6.5%, the same income supports about 378,000 dollars.
Three levels to choose from
- Comfortable (25/33) leaves room for savings, repairs and changes in income.
- Standard (28/36) is the classic guideline for conventional loans.
- Stretch (31/43) reflects FHA limits. You may qualify, but the payment will feel tight.
Qualifying for a loan and being comfortable with the payment are different things. Many buyers aim for the comfortable figure even when a lender would approve more.
What else to budget for
A down payment below 20% usually adds private mortgage insurance, which lowers the price you can afford; the calculator flags it. Closing costs, typically 2 to 5% of the price, are due on top of the down payment, and you will want cash left for moving and repairs. Once you have a price in mind, open it in the mortgage calculator to fine-tune the payment.
Estimates only, not financial advice. A lender pre-approval is the only way to know exactly what you qualify for.