Finance Health Math Other Blog
Login

House Affordability Calculator

$
$
Exclude rent (it will be replaced by mortgage).
$

Enter your financial details to see your home buying budget.

The 28/36 Rule

28% Max housing payment as % of gross income.

36% Max TOTAL debt (housing + car + cards) as % of gross income.

Related Tools
Mortgage Calculator DTI Calculator Payment Calculator
Learn More

Home Affordability Resources:

Note: This is an estimate based on the 28/36 rule. Actual approval depends on credit score, employment, and lender-specific criteria.

How Much House Can You Afford?

Before you start browsing listings, the most important step is knowing your budget. "Falling in love" with a house you can't afford leads to heartache and wasted time.

This calculator uses the industry-standard 28/36 Rule, which is the same guideline banks use internally to assess loan applications. It considers your income, existing debts, and down payment to give you a realistic maximum home price.

Why Affordability Matters

Buying too much house leads to being "house poor" – where most of your income goes to housing, leaving little for savings, emergencies, or enjoyment. The 28/36 rule ensures you have a healthy financial buffer.

The 28/36 Rule Explained

The 28% Rule (Front-End)

Your housing payment (Principal + Interest + Taxes + Insurance) should not exceed 28% of your gross monthly income.

Example: $8,000/mo income × 28% = $2,240 max housing cost.

The 36% Rule (Back-End)

Your TOTAL debt payments (Housing + Car + Student Loans + Credit Cards) should not exceed 36% of gross monthly income.

Example: $8,000/mo income × 36% = $2,880 max total debt.

Trusted Financial Resources

Real-Life Scenarios

Profile: $75,000 income, $400/mo car payment, $25,000 saved, 7% rate.

Calculation: 36% of $6,250/mo = $2,250 max total debt. Minus $400 car = $1,850 max mortgage.

Result: Max loan ~$278,000. With $25k down, can afford a home around $303,000.

Profile: Combined $150,000 income, $0 other debts, $80,000 saved, 6.5% rate.

Calculation: 28% of $12,500/mo = $3,500 max mortgage.

Result: Max loan ~$550,000. With $80k down, can afford a home around $630,000.

Strategies to Increase What You Can Afford

Save More

A larger down payment directly increases your max home price. 20% down also avoids PMI (Private Mortgage Insurance).

Pay Off Debts

Every $100 in monthly debt you eliminate frees up capacity for ~$15,000 more in loan amount.

Add a Co-Borrower

A spouse or partner's income is added to yours, significantly boosting the total you can borrow.

Frequently Asked Questions

Generally, no. The 28/36 rule is a maximum, not a target. Buying below your limit gives you a financial buffer for emergencies, retirement savings, and lifestyle.

This simplified calculator focuses on the loan payment (Principal + Interest). Real PITI (Principal, Interest, Taxes, Insurance) will be higher. Budget 1-2% of home value annually for taxes and insurance.

Conventional loans typically require 620+. FHA loans can go as low as 580 (with 3.5% down). For the best rates (and to match the 28/36 rule assumptions), aim for 740+.

Legal Disclaimer: This calculator provides estimates based on the 28/36 rule. Actual loan approval depends on credit history, employment verification, and lender-specific criteria.