Home Affordability Calculator: How Much House Can I Afford?
This home affordability calculator estimates how much house you can afford based on your income, debts, down payment, and mortgage rate. Enter your numbers in the calculator above to see a target home price and monthly payment. Lenders weigh your income against your debts to decide what you can borrow. Knowing how much house you can afford before you shop keeps your search realistic and your budget safe.
How it's calculated
The calculator above applies the 28/36 rule, a common guideline lenders use to gauge affordability. Under this rule, your monthly housing payment should stay at or below 28% of your gross monthly income, and your total debt payments should stay at or below 36%. Your gross income is what you earn before taxes. The lower of these two limits sets your real budget.
The housing payment here means PITI, not just principal and interest. PITI stands for principal, interest, property taxes, and insurance. If your down payment is under 20%, lenders usually add private mortgage insurance (PMI), which raises the payment. Try our down payment calculator and closing cost calculator to plan the cash you'll need up front.
A worked example
Say you earn $90,000 a year, or $7,500 in gross monthly income. You pay $400 a month toward existing debt, have $40,000 for a down payment, and face a 6.5% rate on a 30-year loan. Under the 28% housing limit, your maximum monthly payment is $2,100. That is the binding limit here, so it sets your budget. With property tax near 1.1% and insurance around $1,800 a year, you can afford a home priced at about $287,000, with a loan of roughly $247,285. The $2,100 payment breaks down to about $1,563 in principal and interest, $263 in property tax, $150 in insurance, and $124 in PMI, since the down payment is under 20%.
Common mistakes to avoid
- Budgeting for only principal and interest. Property taxes, insurance, and PMI are part of every payment and can add hundreds of dollars a month.
- Ignoring existing debt. A car loan or student loan payment shrinks your housing budget close to dollar for dollar under the 36% limit.
- Treating the lender's maximum as your target. Lenders may approve a debt-to-income ratio well above 36%, but a higher ratio leaves less room for emergencies.
- Using take-home pay instead of gross income. The 28/36 rule is based on income before taxes, so using net pay distorts the result.
- Forgetting closing costs and a cash cushion. Stretching your down payment to the limit can leave you short on move-in day and beyond.
Frequently asked questions
How does a home affordability calculator decide how much house I can afford?
A home affordability calculator applies the 28/36 rule to your income, debts, down payment, and rate. It caps your housing payment at 28% of gross monthly income and your total debt at 36%. The lower limit sets your maximum home price. It then includes taxes, insurance, and PMI to show a realistic monthly payment. Before you buy, check your net worth to make sure you're financially ready.
What is the 28/36 rule?
The 28/36 rule says your monthly housing payment should stay at or below 28% of gross monthly income, and all your debt payments combined should stay at or below 36%. It is a guideline, not a law. Lenders use it to estimate how much you can comfortably borrow.
Can I get approved for more than the 28/36 rule allows?
Yes. Many lenders approve higher debt-to-income ratios. Fannie Mae allows up to 50% for some automated approvals. A higher ratio means a bigger payment and less cushion for emergencies, so the safer payment may be lower than the maximum you qualify for.
How does existing debt affect how much house I can afford?
Existing debt lowers your home budget close to dollar for dollar. The 36% total-debt limit covers your housing payment plus car loans, student loans, and credit cards. Every $100 in other monthly debt is $100 less you can spend on housing. Once you buy, our mortgage payoff calculator shows how extra payments shorten your loan.