About the Home Affordability Calculator
The Home Affordability Calculator applies the lender-standard 28/36 rule to your gross income and monthly debts: housing costs (PITI — principal, interest, taxes, insurance) capped at 28% front-end DTI, all debts combined capped at 36% back-end DTI. Inputs for down payment, interest rate, loan term, property-tax rate, insurance, and HOA dues feed a real-time maximum-price output with full PITI breakdown (HOA dues count toward both DTI ratios, as lenders count them).
It is built for first-time buyers asking “how much house can I afford?” without committing to a pre-approval, dual-income households modeling a stretch purchase, refinance shoppers checking whether a rate drop opens up a different price tier, and anyone tired of generic “3× income” rules of thumb that ignore property tax, car loans, and HOA fees that genuinely move the answer.
All calculations run in your browser. Income, debts, down-payment amount, and rate scenarios are never transmitted off your device unless you choose to save them — calculations run in your browser. Nothing is logged or stored in cookies.
Lender qualification and real-life affordability are different numbers. The 28/36 rule tells you what a lender will approve; it does not tell you what is wise. The qualification math ignores maintenance (budget 1% of home value per year), repairs, utilities scaled to a larger property, retirement savings, and the lifestyle bandwidth that disappears when housing eats 28% of gross. Many financial advisors suggest aiming for 20–25% rather than the maximum approval ceiling.
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How to Use the Home Affordability Calculator
Start with your annual gross income — the total before taxes and deductions, not your take-home pay. Add any recurring monthly debt payments (car loans, student loans, credit card minimums, personal loans). Choose your down payment percentage and adjust the interest rate to match current market conditions. The calculator instantly shows the maximum home price a lender would approve based on standard qualifying ratios.
The 28/36 Rule Explained
Most conventional lenders use two debt-to-income (DTI) thresholds to determine how much you can borrow. The front-end ratio caps your total housing costs — principal, interest, property taxes, and insurance (PITI) — at 28% of your gross monthly income. The back-end ratio caps all monthly debt obligations (PITI plus car payments, student loans, credit cards, etc.) at 36% of gross income. Whichever limit is reached first determines your maximum approval. This calculator checks both and uses the more conservative result.
Why Down Payment Size Matters More Than You Think
Putting down less than 20% triggers private mortgage insurance (PMI), which typically adds 0.5–1% of the loan balance annually to your payment. On a $300,000 loan, that is an extra $125–$250 per month that does not build equity. A larger down payment also reduces your loan amount, which means lower monthly payments and significantly less interest over the life of the loan. Even increasing your down payment from 10% to 15% can save tens of thousands in total interest.
How Existing Debt Shrinks Your Buying Power
Debt only shrinks your maximum once it pushes you past the 36% back-end limit. On an $85,000 income (6.75% rate, 30 years, 20% down, 1.25% property tax, $1,800 insurance, no HOA), the 28% housing cap binds until your other debts pass about $567/mo, so a $400 car payment alone leaves the maximum at about $294,200. At $1,000/mo of debts the maximum drops to about $224,700, a $69,500 cut. If your debts are above that threshold, paying off credit cards and small loans, or refinancing a car payment lower, directly raises your approved price.
Interest Rates and Affordability
Small changes in interest rates have an outsized impact. On a $350,000 mortgage, the difference between a 6.0% and 7.0% rate is roughly $230 per month and nearly $83,000 in total interest over 30 years. Use the rate scenario comparison (Pro feature) to see exactly how different rates affect your purchasing power. If rates are high, consider a 15-year mortgage — rates are typically 0.5–0.75% lower, and you build equity dramatically faster.
What This Calculator Does Not Include
This tool estimates your maximum qualifying amount based on standard lending guidelines. Your actual approval may differ based on credit score, employment history, asset reserves, and the specific loan program. FHA loans allow DTI ratios up to 43% (sometimes higher), VA loans have no official DTI cap, and some conventional programs allow up to 45% back-end DTI with compensating factors. Always get pre-approved by a lender for your definitive number.
Tips to Increase Your Home Affordability
- Pay down debt — Once your debts push you past the 36% back-end limit, every $100/mo you eliminate adds roughly $16,000 to your buying power (at 6.75–7%, 20% down)
- Increase your down payment — Eliminates PMI at 20% and reduces your monthly obligation
- Improve your credit score — A score above 740 typically qualifies you for the best rates
- Consider a 15-year loan — Lower rate, faster equity, less total interest
- Shop multiple lenders — Rate differences of 0.25–0.5% are common and worth thousands over time
- Buy below your max — Just because you qualify for $400K does not mean you should spend $400K
Looking for related tools? Try our Mortgage Calculator to estimate your monthly payment, or explore all Home & Real Estate tools.
Frequently Asked Questions
What is the 28/36 rule?
Lenders cap housing costs (principal, interest, taxes, insurance) at 28 percent of gross monthly income (front-end DTI), and all debt payments combined at 36 percent (back-end DTI). A household earning 8,000 dollars monthly can afford up to 2,240 in housing costs and 2,880 total debt payments.
How much house can I afford on 100k salary?
At 100,000 dollars annual income (8,333 monthly), with no other debts, 7 percent interest on a 30-year loan, 20 percent down, 1.2 percent property tax, 1,800 dollars a year of insurance and no HOA, the 28/36 rule caps you at about 345,000 dollars. A 400 dollar car payment does not lower that, because the 28 percent housing cap is the tighter limit until your other debts pass about 667 dollars a month (8 percent of income). At 1,000 dollars a month of other debts the maximum falls to about 293,000 dollars, and each further 100 dollars of monthly debt removes roughly 16,000 dollars.
Do lenders use gross or net income?
Gross income before taxes. Mortgage qualification uses gross to compare with national housing data and because take-home pay varies based on withholdings, benefits, and 401k contributions that a borrower could technically pause to make payments.
How does a down payment affect how much I can borrow?
A larger down payment doesn't increase borrowing power but lets you buy a more expensive home without changing your monthly payment. It also eliminates PMI at 20 percent down, often saving 100 to 300 dollars monthly. On a 400,000 home, 10 percent down requires PMI; 20 percent down does not.
Should I buy at my maximum qualification?
Usually no. Lenders qualify you based on gross income, but your actual budget has to cover utilities, maintenance (plan 1 percent of home value per year), repairs, retirement savings, and lifestyle. Many financial advisors suggest spending 20 to 25 percent of gross income on housing, not the full 28 percent.
