How Much House Can I Afford? Home Affordability Calculator
Affordability calculator
Find the home price you can comfortably afford based on your income, monthly debts, and down payment. This calculator uses the 28/36 rule that lenders rely on to size your budget.
- Free to use
- No sign-up
- Based on the 28/36 rule
Your finances
How this calculator works
Lenders commonly use the 28/36 rule: your housing payment should stay near 28% of your gross monthly income, and your total debt — housing plus everything else — should stay under your chosen back-end limit (36% by default).
A bigger down payment raises the price you can reach, because your budget caps the loan you can carry — the down payment sits on top of that maximum.
Frequently asked questions
What is the 28/36 rule?
A lending guideline: aim to spend no more than 28% of gross monthly income on housing, and no more than 36% on total debt including housing. Many programs allow higher back-end ratios (43–45%).
Does this guarantee loan approval?
No. It estimates comfortable affordability. Approval depends on your credit score, employment history, loan type, and the lender’s underwriting.
Should I borrow the maximum?
Not necessarily. This shows a ceiling, not a target. Leaving room in your budget for savings, maintenance, and emergencies is usually wise.
Estimates only. This tool does not provide financial advice and is not a lending decision. We are not a lender or financial advisor.
Program types and eligibility rules can affect what buyers explore before purchasing. Learn how first-time buyer program options may vary in our plain-English overview.
Disclaimer: The Housing Signal is an independent educational publisher. We are not a mortgage broker, lender, or licensed financial advisor, and nothing here is personalized financial advice. Calculator results are estimates based on the figures you enter and the assumptions published alongside each tool; they are not a quote, a pre-approval, or an offer of credit. Rates, programs, costs and market conditions change frequently, and national figures may not reflect your local market or your own circumstances. Figures cited are accurate as of the dates given and will change. Consult a licensed professional before making a decision.
Take your numbers to an open house, broker, or bank appointment. In the print dialog, choose “Save as PDF.”
How Lenders Decide What You Can Afford
Affordability is not a feeling — it is a ratio. Lenders start with your gross monthly income, cap your housing payment at roughly 28% of it, cap your housing payment plus every other monthly debt at roughly 36%, and work backward from whichever ceiling binds first. The calculator above runs that math instantly; here is how to reproduce it by hand so you can sanity-check any pre-approval letter you receive.
How to calculate home affordability (step by step)
- Start with gross monthly income. Use pre-tax income, including reliable bonus or self-employment income a lender can document over two years.
- Apply the front-end ratio. Gross income × 0.28 → the maximum total housing payment (principal, interest, taxes, insurance, plus HOA dues where they apply).
- Apply the back-end ratio. Gross income × 0.36 → the ceiling for housing plus all other monthly debts. Subtract your car, student loan, and minimum card payments. Whichever of the two results is lower is your real ceiling.
- Strip out taxes and insurance. Subtract estimated monthly property tax and homeowners insurance from that ceiling to isolate what is left for principal and interest.
- Convert principal and interest into a price. Divide by the payment factor for today’s rate, then add your down payment. The 30-year fixed average is 6.58% and the 15-year averages 5.96% (Freddie Mac PMMS, week ending July 23, 2026).
A worked example you can verify by hand
Take $8,000 in gross monthly income and $500 in existing car and student loan payments. The 28% front-end cap allows $2,240 in housing costs; the 36% back-end cap allows $2,880 total, minus $500 in debts, leaving $2,380 — so the 28% ceiling binds first at $2,240. Subtract roughly $346 in monthly property tax (an illustrative 1.2% annual rate) and $125 in insurance, leaving $1,769 for principal and interest. At 6.58% over 30 years the payment factor is 0.0063734 per dollar borrowed, so $1,769 ÷ 0.0063734 supports a loan near $277,000. Add a 20% down payment of about $69,000 and your price ceiling lands near $346,000. Enter the same inputs above — the calculator should land in the same range.
How much income do you need to buy a $400,000 house?
With 20% down at 6.58%, a $400,000 home runs about $2,564 a month in principal, interest, taxes, and insurance. Under the 28% rule, that requires roughly $9,160 in gross monthly income — about $110,000 a year — before any other debts are counted. Property tax rates and insurance premiums vary widely by county.
What debts do lenders count when calculating affordability?
Lenders count recurring monthly obligations that appear on your credit report: car loans, student loans, minimum credit-card payments, personal loans, child support, and alimony. Utilities, groceries, phone bills, and insurance premiums are excluded. Those counted debts plus your full housing payment must stay under about 36% of gross monthly income.
Does a larger down payment increase how much house you can afford?
Yes — but less than most buyers expect. A larger down payment shrinks the loan, lowers the payment, and can remove PMI, all of which raise your maximum price. It does not raise your income, so the 28/36 debt-to-income ceiling still caps you. Cash reserves left after closing also matter to underwriters.
Before you run your numbers
Once you have a price range, price the payment itself in our mortgage payment calculator, then pressure-test the ongoing costs most affordability estimates leave out in our breakdown of the true cost of homeownership. If your rate quote looks high, the fastest lever is usually your score — see how to improve your credit score for a mortgage. For a fuller walkthrough of the ratios, read how much house you can afford. And if buying is still an open question rather than a settled one, the rent vs. buy calculator compares both paths over the years you expect to stay.