Home Affordability Calculator

How much house can you afford? Get your maximum price from the 28/36 rule with the full payment breakdown

Income & Debts

Annual Gross Income ($)

Household, before taxes

Monthly Debt Payments ($)

Car, student loans, card minimums

Down Payment ($)

Loan & Housing Costs

Interest Rate (%)

Loan Term (years)

Property Tax Rate (%/yr)

US average ≈ 1.1%

Home Insurance ($/yr)

HOA ($/mo)

PMI Rate (%/yr)

Applies under 20% down

Front-End DTI (%)

Housing ÷ income — 28 classic

Back-End DTI (%)

All debts ÷ income — 36 classic

Guideline, not pre-approval: Lenders weigh credit score, loan program, reserves, and income documentation — approved amounts can be higher or lower than DTI math alone. What you can borrow is also not always what you should spend.

All finance

Quick summary

This calculator finds the highest home price whose full monthly payment (principal, interest, property tax, insurance, HOA, and PMI when you put down less than 20%) fits within the 28% housing and 36% total-debt ratios. Example: $100,000 of income, $500 of monthly debts, and $40,000 down at 6.5% supports a home of about $317,000. Results are estimates of what the ratios allow, not a loan approval.

Reviewed by Simple Calculators TeamLast reviewed July 11, 2026

For planning only — not financial or tax advice. Results are estimates based on your inputs and the stated assumptions. Confirm important decisions with a qualified professional.

How to use this calculator

Enter your Annual Gross Income ($), your total Monthly Debt Payments ($) such as car, student loan, and card minimums, and your Down Payment ($).
Enter the Interest Rate (%) and Loan Term (years) you expect to get.
Enter your Property Tax Rate (%/yr), Home Insurance ($/yr), and HOA ($/mo) for the area you are shopping in.
Set the PMI Rate (%/yr), which applies only if your down payment ends up under 20% of the price.
Keep Front-End DTI (%) at 28 and Back-End DTI (%) at 36, or enter your lender's limits.
Read the maximum home price under You Can Afford a Home Up To, the all-in monthly payment, which ratio limits you, and the Loan Amount, Down Payment, Housing Budget, and Payment ÷ Income cards.

Home Affordability Formulas

Monthly Housing Budget (28/36 Rule)

B = \min\left(\frac{I}{12} \times F,\ \frac{I}{12} \times K - D\right)

B: Maximum monthly housing payment
I: Annual gross household income
F: Front-end DTI limit (28% by default)
K: Back-end DTI limit (36% by default)
D: Other monthly debt payments

Worked example

$100,000 income with $500/month of other debt payments

Given: I = $100,000 ($8,333.33/month)
F = 28%
K = 36%
D = $500
Calculation: $B = \min(8{,}333.33 \times 0.28,\ 8{,}333.33 \times 0.36 - 500) = \min(2{,}333.33,\ 2{,}500)$
Result: B = $2,333.33 per month (the front-end ratio is the binding limit)

Maximum Home Price

\text{Price} = \frac{B - \frac{\text{Ins}}{12} - \text{HOA} + \text{Down} \times (f + m)}{f + m + \tau}

f: Payment factor per loan dollar: i(1+i)^n ÷ ((1+i)^n − 1), with i = rate ÷ 12, n = term × 12
m: Monthly PMI per loan dollar (PMI rate ÷ 12), only when the down payment is under 20%
τ: Monthly property tax per dollar of price (tax rate ÷ 12)
Ins, HOA: Annual home insurance and monthly HOA dues
Down: Cash down payment

Worked example

Budget of $2,333.33, $40,000 down, 6.5% for 30 years, 1.1% property tax, $1,800/yr insurance, no HOA, 0.6% PMI

Given: f = 0.0063207
m = 0.0005 (0.6% ÷ 12; down payment is under 20%)
τ = 0.00091667 (1.1% ÷ 12)
Down = $40,000
Calculation: $\text{Price} = \frac{2{,}333.33 - 150 - 0 + 40{,}000 \times 0.0068207}{0.0068207 + 0.00091667}$
Result: Price ≈ $317,442 (loan ≈ $277,442; payment ≈ $2,333.33/month all-in)

Frequently asked questions

How much house can I afford on my salary?

How much house you can afford depends mainly on your income, debts, down payment, and interest rate. Under the 28% rule, a $100,000 income allows about $2,333 a month for housing. With $500 of other monthly debts, $40,000 down, a 6.5% 30-year rate, 1.1% property tax, and $1,800 a year of insurance, this calculator puts the maximum at about $317,000.

What is the 28/36 rule?

The 28/36 rule is a lending guideline: spend no more than 28% of gross monthly income on housing and no more than 36% on all debt payments combined. Housing includes principal, interest, property tax, insurance, HOA dues, and PMI. Whichever limit you reach first caps your budget, which is why existing car or student loan payments can shrink how much house you can buy.

How is the maximum home price calculated?

The maximum home price is calculated by solving for the price whose full monthly payment exactly equals your housing budget. The calculator takes the lower of your 28% front-end and 36% back-end budgets, subtracts fixed costs like insurance and HOA, and divides by the monthly cost per dollar of price, including the loan payment, property tax, and PMI when your down payment is under 20%. If adding PMI would pull the price back below the 20%-down line, the answer is the price at exactly 20% down, where no PMI applies and the payment comes in a little under budget.

Do lenders actually stop at 36% DTI?

Not always; many lenders approve back-end ratios above 36% depending on the loan program, credit score, savings, and down payment. You can raise the Back-End DTI (%) field to see what a higher limit allows. Keep in mind that the amount a lender approves and a comfortable budget are different things, because DTI is measured on gross income before taxes, savings, and living costs.

How do my other debts affect what I can afford?

Other debts reduce what you can afford only when the 36% back-end limit is the one that binds. In that case, every extra dollar of monthly debt removes a dollar from your housing budget. With $100,000 of income and $40,000 down at 6.5%, this calculator shows each additional $100 of monthly debt lowering the maximum price by roughly $13,000 once the back-end limit applies.

Should I buy at the maximum I qualify for?

Buying at the maximum is a personal decision, and the result here shows only what the ratios allow. It does not account for retirement savings, childcare, repairs, commuting, or an emergency fund. Many buyers test a lower price to see how the payment compares with their take-home pay, and lowering the Front-End DTI (%) field is a quick way to do that.

What are common mistakes when estimating home affordability?

A common mistake is budgeting only for principal and interest and forgetting property tax, insurance, HOA dues, and PMI, which this calculator includes. Others are entering take-home pay instead of gross income (the ratios are based on gross), leaving out minimum credit card payments from monthly debts, and spending the entire down payment savings without keeping cash for closing costs, moving, and repairs.

Key terms

Front-End DTI: Housing costs ÷ gross monthly income — classically capped at 28%.
Back-End DTI: All monthly debt payments ÷ gross monthly income — classically capped at 36%, though lenders often allow more.
PITI: Principal, Interest, Taxes, Insurance — the full housing payment lenders count against your front-end ratio.
Binding Constraint: Whichever DTI limit you hit first; with high existing debts, the back-end ratio caps your budget before the housing ratio does.

Methodology, sources & limitations

This page shows the formula, assumptions, and limitations used for this estimate. Rates, thresholds, and other time-sensitive inputs can change, so verify them against the relevant official source before relying on a result.

For our review approach and the primary sources we consult, see the methodology and source policy. If you spot an outdated figure or formula, please contact us with a correction.

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