Find out how much house you can afford based on your income, debts, and down payment. See conservative, moderate, and aggressive scenarios using the 28/36 rule.
This home affordability calculator uses the industry-standard 28/36 debt-to-income rule to calculate the maximum home price you can comfortably afford. It accounts for your income, existing debts, down payment, interest rate, property taxes, and insurance to give you three scenarios: conservative (what you can comfortably afford), moderate (the lender standard), and aggressive (the maximum most lenders will approve). Use this as your starting point before talking to a lender. All calculations run in your browser — your data never leaves your device.
The calculator starts from the 28/36 rule to determine the maximum allowable monthly housing payment, then works backward through the mortgage formula to find the maximum loan amount, and finally adds your down payment to arrive at the maximum home price.
Max PITI = Gross Monthly Income × DTI Threshold (28%–43%)
Max P&I = Max PITI − (Property Tax/12) − Insurance/12 − PMI
Max Loan = Max P&I × (1 − (1+r)^−n) / r
Max Home Price = Max Loan + Down Payment
The calculator also applies the back-end 36% constraint: your existing monthly debts are subtracted from the maximum total debt payment to find how much room is left for housing costs. The binding constraint — whichever is lower between the front-end 28% limit and the back-end debt-adjusted limit — determines your true maximum home price. Three scenarios (28%, 36%, and 43%) let you see conservative vs. lender-maximum affordability side by side.
Kevin and Maria have a combined gross income of $95,000/year ($7,917/month). They have existing debts of $450/month (car payment + student loan minimum). They have $60,000 saved for a down payment. Current 30-year mortgage rates are 7.0%. Their target area has property taxes of about 1.2%/year and they estimate $150/month for homeowner's insurance.
Front-end (28%): Max PITI = $7,917 × 0.28 = $2,217/month. Subtract estimated tax ($300K home × 1.2% / 12 = $300) and insurance ($150): max P&I = $2,217 − $300 − $150 = $1,767. At 7% over 30 years, that P&I supports a loan of about $265,000. With $60,000 down: max home price ≈ $325,000.
Back-end check (36%):Max total debts = $7,917 × 0.36 = $2,850. Subtract existing debts ($450): remaining for housing = $2,400. That is higher than the $2,217 front-end limit, so the front-end limit is the binding constraint. Kevin and Maria's conservative maximum is a $325,000 home with $60,000 down — putting them comfortably within both guidelines and leaving buffer for unexpected costs.
A commonly cited rule of thumb is that your home purchase price should be 2.5–3× your annual gross income. On a $95,000 salary that suggests $237,500–$285,000. However, this guideline does not account for your existing debts, down payment size, local property taxes, or interest rate — all of which dramatically affect your actual affordable price. Our home affordability calculator uses the 28/36 rule to give you a more precise estimate based on your full financial picture, including debt payments and down payment.
The 28/36 rule is the underwriting guideline most lenders use to evaluate mortgage applications. It says that your total monthly housing costs (mortgage P&I, property taxes, insurance, PMI, and HOA) should not exceed 28% of your gross monthly income (front-end DTI), and all debt payments combined (housing plus car loans, student loans, credit card minimums, etc.) should not exceed 36% of gross monthly income (back-end DTI). On a $7,917/month gross income ($95,000/year), the limits are $2,217 for housing and $2,850 for all debts combined. Conventional lenders may allow up to 43–45% back-end DTI with strong compensating factors.
A 20% down payment is the traditional benchmark because it eliminates PMI and typically qualifies you for better interest rates. However, many buyers put down far less: FHA loans require only 3.5% down, conventional loans can be as low as 3% through certain programs, and VA loans offer 0% down for eligible veterans. A smaller down payment means a larger loan, higher monthly payment, and usually PMI costs of $50–$200+/month until you reach 20% equity. The right down payment depends on your savings, local home prices, and how long you plan to stay — keeping enough cash reserves for emergencies after closing is just as important as the down payment itself.
Debt-to-income (DTI) ratio is expressed as a percentage: your total monthly debt payments divided by your gross monthly income. Lenders look at two versions. Front-end DTI covers only your proposed housing costs (mortgage, taxes, insurance, HOA, PMI) and should be under 28% for conventional loans. Back-end DTI includes all monthly debts — housing plus car payments, student loans, credit card minimums, personal loans, and any other recurring obligations — and should be under 36%–43% for conventional loans. FHA loans allow up to 50% back-end DTI in some cases. Reducing your monthly debt payments before applying is one of the most effective ways to improve your affordability.
Start by determining your target — typically 20% of your expected purchase price plus 2–5% for closing costs (inspections, appraisal, title insurance, and prepaid costs). Open a dedicated high-yield savings account specifically for this goal, separate from your emergency fund. Automate monthly transfers on payday so the money is set aside before you can spend it. Look into first-time homebuyer programs in your state — many offer grants, forgivable loans, or below-market-rate mortgages for qualifying buyers. Use our savings calculator to find out exactly how long it will take at your current savings rate, then adjust contributions as needed to hit your target date.