Home Affordability Calculator

Please fill in the required fields with values greater than 0.
–maximum home price
–loan amount
–monthly housing budget
–principal and interest (monthly)

Estimate using the 28/36 rule: housing costs at most 28% of gross income and total debts at most 36%. Lenders use their own rules. This is not financial advice.

How to use this calculator

Enter your income, your other monthly debts, the down payment you have and the mortgage rate. Press Calculate to see the home price that fits the 28/36 rule, with property tax and insurance included.

The formula

Housing budget = the smaller of 28% of monthly income and 36% of monthly income minus other debts
Price = loan + down payment, where the loan payment plus tax and insurance equals the budget

Example: With a $100,000 income, $500 of other debts, $60,000 down, a 6.5% 30-year loan, 1.1% property tax and $1,200 insurance, the budget is $2,333 a month and the home price is about $361,000.

What your home affordability estimate means

The calculator sets a monthly housing budget using the 28/36 rule, then works backward to the loan and home price that fit that budget. The housing budget covers principal, interest, property tax and insurance. Your maximum home price is that loan plus your down payment. Treat it as a ceiling, not a target.

A worked example

With $100,000 in gross yearly income, monthly income is about $8,333. Twenty-eight percent of that is about $2,333. The 36% limit is $3,000, minus $500 of other debts, or $2,500. The tool uses the lower figure, $2,333. With a $60,000 down payment, a 6.5% 30-year rate, 1.1% property tax and $1,200 a year for insurance, the estimated home price is about $361,000.

What changes the result

  • Mortgage rate. A higher rate means more of each payment goes to interest, so the loan you can carry shrinks.
  • Other debts. Car loans, student loans and card minimums count against the 36% limit. Paying one off can raise your budget.
  • Down payment. Each extra dollar down adds directly to the price you can reach.
  • Loan term. A 15-year loan has higher monthly payments, so it lowers the maximum price, though you pay much less interest overall.
  • Property tax and insurance. Rates vary widely by area. High-tax areas take a big share of the budget.

Common mistakes

  • Using take-home pay instead of gross income. The 28/36 rule is based on gross income.
  • Ignoring HOA dues and mortgage insurance. If you put down less than 20%, many loans add a monthly insurance cost.
  • Spending all your savings on the down payment. Keep money for closing costs, moving and repairs.
  • Assuming the maximum is comfortable. Childcare, commuting and retirement saving are not in the formula.

Planning tips

Try a few scenarios, such as a rate one point higher or a smaller down payment, to see how much room you have. Budget about 1% of the home’s value each year for upkeep. Get pre-approved before you shop seriously, since lenders apply their own limits. This tool is educational and is not financial advice. A financial advisor or loan officer can review your full situation.

Frequently asked questions

How much house can I afford?
A common guide is to spend no more than 28 percent of your gross income on housing and 36 percent on all debts together.
What is the 28/36 rule?
The 28 percent limit applies to housing costs and the 36 percent limit applies to all monthly debts including the mortgage.
Does a bigger down payment help?
Yes. It lowers the loan, the monthly payment and may remove mortgage insurance.
What costs are not included?
Mortgage insurance, HOA fees, maintenance, utilities and closing costs.
Will a lender approve me for this amount?
Not always. Lenders also look at your credit score, savings and job history. Ask for pre-approval to know for sure.
How much house can I afford on a $75,000 salary?
Using the 28% guideline, $75,000 a year allows about $1,750 a month for housing, including tax and insurance. The final price depends on your rate, other debts and down payment. Enter your numbers in the calculator to see an estimate. This is educational only, and a lender will set your actual limit.
What is a debt-to-income ratio?
Debt-to-income ratio, or DTI, is your total monthly debt payments divided by your gross monthly income. Lenders look at it to judge whether you can handle a new mortgage. For example, $3,000 in monthly debts on $8,333 of monthly income is a DTI of about 36%. A lower DTI usually means more loan options.
How much should I save for closing costs?
Closing costs typically run about 2 to 5% of the loan amount, covering lender fees, title insurance, appraisal and prepaid taxes. On a $300,000 loan, that is roughly $6,000 to $15,000. Ask your lender for a Loan Estimate early so you can plan. Some sellers agree to pay part of these costs.