Home Affordability Calculator (28/36 Rule)
Estimate how much house you can afford from income, debts, down payment, rate, taxes, and insurance using lender front-end and back-end DTI caps.
Home Affordability — interactive calculator, computed instantly in your browser.
How Much House Can You Afford? The 28/36 Rule Explained
The Lender's Two Caps, Stacked on One Price
"How much house can I afford" has a lender's answer, not a wish-list answer. Underwriters apply two ratios to your gross monthly income (before tax): the front-end ratio caps total housing cost (PITI) at about 28%, and the back-end ratio caps housing plus all other debts at about 36%. Whichever cap binds harder sets your real ceiling — this calculator solves both, then back-solves the maximum home price they imply.
1. The Two Spending Caps
- Income $100,000/yr → gross monthly $8,333 → front-end cap $2,333
- Back-end: 36% × $8,333 = $3,000, minus $500 of car/card payments → $2,500 available for housing
- The binding limit is the smaller number — here the front-end $2,333 — and every dollar of extra monthly debt you carry eats the back-end cap
- Some lenders stretch to29/41 or33/38; government programs sometimes allow higher with good credit — treat28/36 as the conservative floor
2. From Monthly Cap to Home Price
The tricky part: property tax is a percentage of the price you are solving for. The algebra collapses neatly because mortgage principal-and-interest is a fixed fraction f = r ÷ (1 − (1+r)−n) of the loan — at6.5% over30 years, f ≈0.00632 per month per dollar borrowed. Solve price = (PITI cap + down × f − insurance) ÷ (f + tax/12) and the default inputs return about $352,000, funded by a $302k loan plus $50k down. Rate sensitivity is brutal: each +0.5% on the mortgage shrinks the ceiling by roughly4% of price.
3. Costs the Ratio Ignores
- PMI: under20% down adds roughly0.3%–1% of the loan annually until you reach80% equity — outside the DTI math but inside your wallet
- HOA dues, special assessments, and rising tax/insurance bills all push PITI up after closing
- Closing costs (2%–5% of price) and moving funds must come from cash — don't spend your entire down payment to hit the ratio
- Get pre-approved (income and credit verified) before house hunting — a pre-qualification letter alone carries little weight in competitive markets
🔗 Home-Buying Cross-References
Affordability sets the price ceiling — the mortgage calculator turns that ceiling into a monthly payment, all indexed from our 💰 Financial Hub.
Lenders qualify on gross income and total DTI, so clear car and card payments first, then re-run this tool with the real numbers.
Frequently Asked Questions (Home Affordability)
A lending guideline: total housing expenses should stay under28% of gross monthly income, and housing plus all other debt payments under36%. It is the baseline underwriting standard in the US — not a legal limit, so individual lenders and loan programs vary.
With $500 in monthly debts, $50k down,6.5% over30 years,1.1% property tax, and $1,200 insurance, this calculator lands near $352,000 — a $302k loan fitting inside the28% housing cap of $2,333/month. Lower rates, smaller debts, or a bigger down payment each raise that ceiling.
Modestly — the ratio caps the monthly payment, not the price, so extra down mainly removes mortgage insurance and shrinks interest. The bigger lever is monthly debt: paying off a $500 car payment can lift the affordable price by tens of thousands.
Principal, Interest, Taxes, and Insurance — the four components of a lender's housing payment. Add HOA dues and PMI when applicable and you get the full monthly cost of ownership that the front-end ratio measures.