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House Affordability Calculator
Determine your maximum home purchase price based on standard lending rules (28/36 rule), your income, debts, and current interest rates.
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Maximum Home Price
$0
Based on standard lending criteria
Max Mortgage Amount
$0
Loan amount from the bank
Est. Monthly Payment (P&I)
$0
Principal & Interest only
28% Rule Limit
$0
Max allowed for housing payment
36% DTI Rule Limit
$0
Max allowed for ALL debts combined
How it works (28/36 Rule)
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1. Max Housing Payment = Gross Income × 0.28
2. Max Total Debt Limit = Gross Income × 0.36
3. Adjusted Housing Limit = Max Total Debt Limit - Current Monthly Debts
4. Actual Allowed Payment = MIN(Max Housing Payment, Adjusted Housing Limit)
5. Max Mortgage = Calculate Present Value based on Actual Allowed Payment, Rate, and Term
6. Max Home Price = Max Mortgage + Down Payment
2. Max Total Debt Limit = Gross Income × 0.36
3. Adjusted Housing Limit = Max Total Debt Limit - Current Monthly Debts
4. Actual Allowed Payment = MIN(Max Housing Payment, Adjusted Housing Limit)
5. Max Mortgage = Calculate Present Value based on Actual Allowed Payment, Rate, and Term
6. Max Home Price = Max Mortgage + Down Payment
Examples
- $8k/mo income, $500/mo debt, $60k down, 6.5% rate: Allowed payment ~$2,240. Max mortgage ~$354k. Max home ~$414k.
- $5k/mo income, $1k/mo debt, $20k down, 7% rate: DTI severely limits mortgage. Allowed payment ~$800. Max home ~$140k.
Frequently Asked Questions
What is the 28/36 rule?
It's a common rule of thumb used by mortgage lenders. It states that a household should spend a maximum of 28% of its gross monthly income on total housing expenses, and no more than 36% on total debt service (including housing).
Does this include taxes and insurance?
This calculator determines Principal & Interest (P&I) based on the limits. In reality, lenders include Property Taxes and Insurance (PITI) in the 28% limit. This means your actual maximum loan might be slightly lower to account for taxes/insurance.
What if I have no debts?
If your non-housing debts are zero, the 28% rule is usually the bottleneck, restricting your housing payment to 28% of your gross income.
Can I get approved for more than this calculator says?
Yes, some lenders allow Debt-to-Income (DTI) ratios up to 43% or even 50% for FHA loans, but pushing limits increases financial risk. The 28/36 rule is the standard for affordability.