House Affordability Calculator
Estimate a comfortable home price from your income, debts, down payment and loan details.
Results
| Item | Comfortable (28/36) | Stretch (36/43) |
|---|
Quick Answer
A common guide is the 28/36 rule: spend no more than 28% of gross income on housing and 36% on all debts. With a $90,000 income, $400 in monthly debts, $40,000 down, a 6.5% 30-year loan, 1.1% property tax and $1,800 insurance, that points to a home price of about $304,369.
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Table of Contents
How This House Affordability Calculator Works
This calculator works backward from your income. It finds the most you could spend on housing each month, removes taxes and insurance, and turns what is left into a home price using your loan details.
Quick explanation: the budget is the smaller of 28% of monthly income, or 36% of monthly income minus your debts.
- Comfortable: uses the common 28/36 guide.
- Stretch: uses 36/43, which leaves much less room in your budget.
- Monthly housing budget: includes principal, interest, property tax and insurance.
Core Formulas
- Housing budget: B = min(front ratio × income, back ratio × income − debts)
- Payment factor: f = r ÷ (1 − (1 + r) ^ −n)
- Home price: (B − insurance + down payment × f) ÷ (f + tax rate)
Income, insurance and tax are monthly here. r is the monthly rate and n is the number of monthly payments.
Worked Example
You earn $90,000 a year, pay $400 a month in debts, and have $40,000 for a down payment. Your loan is 6.5% for 30 years, with 1.1% property tax and $1,800 a year for insurance.
- 28% of $7,500 monthly income = $2,100
- 36% of $7,500, minus $400 = $2,300
- The smaller figure is $2,100, which supports a home price of about $304,369
- The stretch budget of $2,700 supports about $387,273
What Can Change Your Budget
- Credit score: this affects the rate you are offered.
- PMI: a small down payment can add monthly mortgage insurance.
- HOA fees and repairs: these are real monthly costs, so leave room for them.
- Loan program: lenders and programs use different limits. The 28/36 rule is a guide, not a rule set by law.
Frequently Asked Questions
A common guide is to keep housing at 28% of gross income or less. Enter your income, debts and loan details above for an estimate.
It suggests spending up to 28% of gross income on housing and up to 36% on all debts, including housing.
No. It is a guideline. Many lenders accept higher ratios, depending on the loan and the borrower.
No. If you expect these costs, your real budget will be lower. Add them to your monthly debts for a rough estimate.
It depends on your savings and loan type. A larger down payment lowers the loan and the monthly payment. Try our Down Payment Calculator.
References & Sources
| Source | Used For | Link |
|---|---|---|
| Bankrate, What is the 28/36 rule | Definition of the 28/36 guide. | https://www.bankrate.com/mortgages/what-is-the-28-36-rule |
| Rocket Mortgage, Why the 28/36 rule matters | What the ratios include. | https://www.rocketmortgage.com/learn/28-36-rule |
| Consumer Financial Protection Bureau, Owning a home | General guidance for home buyers. | https://www.consumerfinance.gov/owning-a-home/ |