π‘ Home Affordability Calculator
How much house can you really afford? The 28/36 rule, done right.
Maximum Home Price
Estimates for planning only, not financial advice.
How to Use This Calculator
Enter your gross income, debts, down payment, and the loan and tax details. The calculator applies both halves of the 28/36 rule, takes the lower result, and solves for the home price that fits. The comparison table shows which rule is actually limiting you.
Enter your Gross Annual Income (before taxes) and your Monthly Debts (car loans, student loans, card minimums, child support).
Enter your Down Payment in dollars and the APR and Term you expect to qualify for.
Enter the Property Tax Rate for your area (% per year of the home price), your Insurance ($/yr), and HOA ($/mo). Taxes vary hugely by state, so use a local number.
Compare the 28% vs 36% table: if the 36% number is lower, paying down debts buys you more house than saving a bigger down payment.
The 28/36 Rule and the Math Behind It
Lenders check two ratios. The front-end ratio caps your housing payment at 28 percent of gross income. The back-end ratio caps housing plus all other debts at 36 percent. Whichever is tighter wins. The formula then works backward: given the max payment, subtract the fixed costs (taxes on the price, insurance, HOA), and solve for the price whose mortgage payment plus price-based tax exactly fills the budget. That closed-form solve is what the calculator does above, so there is no guessing.
Worked Example
$100,000 income = $8,333/mo. Front-end cap: 0.28 x 8333 = $2,333. Back-end cap: 0.36 x 8333 - 500 debts = $2,500. The 28 percent rule binds at $2,333. At 6.5 percent, 30 years, the monthly P&I factor per $1 borrowed is 0.006321. With a 1.1 percent tax rate, $1,800/yr insurance, no HOA, and $40,000 down: price = (2333 - 150 - 0 + 40000 x 0.006321) / (0.006321 + 0.011/12) = $336,610. The monthly P&I on that price is about $1,875, plus $309 tax and $150 insurance = $2,333. Front-end DTI lands at exactly 28.0 percent and back-end at 34.0 percent.
Practical Guidance: Stretching the Number Honestly
If the 36 percent rule binds you, every dollar of monthly debt you eliminate frees a dollar of housing budget, and then some: killing a $300 car payment can add $40,000 or more to your max price. If the 28 percent rule binds you, your levers are a bigger down payment, a lower rate (points, better credit, rate shopping), or a cheaper area with lower taxes. Remember that lenders use gross income while you live on take-home pay, so sanity-check the monthly payment against your real budget. A payment that passes the 28 percent test can still feel tight if you have high childcare or commuting costs the formula never sees.
Estimates for planning only, not financial advice.
Frequently Asked Questions
What is the 28/36 rule?
It is the guideline most lenders use. The 28 percent rule: your total housing cost (principal, interest, taxes, insurance, HOA) should not exceed 28 percent of your gross monthly income. The 36 percent rule: your housing cost plus all other monthly debts should not exceed 36 percent. The lower of the two is your real budget. This calculator applies both and shows which one binds you.
How much house can I afford on $100k?
Roughly $336,000 with 20 percent down-ish math. On $100,000 of income ($8,333/mo), 28 percent allows $2,333 for housing and 36 percent allows $3,000 for housing plus debts. With $500 in debts, the 28 percent rule binds at $2,333. At 6.5 percent, 30 years, 1.1 percent tax, $1,800 insurance, and $40,000 down, that supports a home price around $336,000. Change the inputs above for your exact numbers.
What counts in DTI?
Debt-to-income uses monthly minimum payments: car loans, student loans, credit card minimums, personal loans, child support, and the proposed housing payment itself. It does not include utilities, groceries, subscriptions, or taxes withheld from your paycheck. Lenders use the minimums on your credit report, not what you choose to pay, which is why paying a card to zero helps more than paying it down halfway.
How does down payment change affordability?
A bigger down payment raises your max price in two ways: it reduces the loan you need for any given price, and lenders may offer slightly better rates with more equity. On a $336,000 home at 6.5 percent, going from $40,000 to $60,000 down cuts the monthly P&I by about $126 and drops total interest by over $45,000. It also moves you closer to 20 percent, where PMI disappears.
Do lenders use gross or net income?
Gross income: before taxes and deductions. This surprises people, because your take-home pay is much smaller. The rule of thumb still works because lenders also ignore many of your real expenses like groceries and childcare. But be careful: on a $100,000 salary, 28 percent of gross is $2,333 a month, while your take-home might only be $6,200. Make sure the payment fits your actual budget, not just the lender's formula.