Home Affordability Calculator United States
This 28/36 rule calculator estimates the US home price you can afford, keeping housing costs within 28% and all debts within 36% of your gross monthly income.
What it does
The Home Affordability Calculator estimates the house price you can afford in the US using the 28/36 rule — keeping housing costs within 28% of your gross income and total debt within 36% — based on your income, existing debts, down payment and mortgage rate.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Max PITI = min(income/12 × front%, income/12 × back% − debts); max loan = P&I budget × (1 − (1 + i)^−n) ÷ i (or P&I × n at 0% rate); home price = max loan + down payment
How it works
It turns your gross annual income into a monthly figure, applies the front-end ratio to cap housing costs and the back-end ratio (less your other debts) to cap total debt, and takes the lower of the two as your maximum PITI. After subtracting taxes and insurance, the remaining principal-and-interest budget is converted into a maximum loan over the term, and your down payment is added to get the affordable home price.
Where it is used
- Setting a realistic budget before house-hunting
- Seeing how paying down debt raises your buying power
- Testing how a larger down payment or lower rate changes the price you can afford
Worked example
On $80,000.00 a year with $500.00 of monthly debts and $40,000.00 down at 6.5%, the 28/36 rule supports a monthly payment of …, a loan of … and a home price of ….
How the 28/36 rule works
This home affordability calculator applies the 28/36 rule to your gross income, existing debt payments, down payment and mortgage rate. It estimates the loan you can support and the home price that implies, which is useful before you start viewing homes or talking to a loan officer.
The rule sets two limits. The front-end ratio says your monthly housing cost (principal, interest, property taxes and homeowners insurance, together called PITI) should not exceed 28% of gross monthly income. The back-end ratio says all monthly debt payments combined, including housing, car loans, student loans and credit card minimums, should not exceed 36%. Your affordable payment is the smaller of the two. With little other debt the front-end ratio usually decides it; with a large car payment the back-end ratio does.
From monthly payment to home price
The calculator takes your maximum PITI, subtracts your estimated monthly taxes and insurance, and runs the rest backwards through the standard mortgage formula for your term and rate to find the largest loan that payment can cover. It then adds your down payment to get the maximum home price.
Taxes and insurance matter more than most buyers expect. Property tax rates range from well under 1% of value in some areas to over 2% in others, and homeowners insurance has risen sharply in many markets. Because that cost comes out of your housing budget before anything reaches principal and interest, the same budget can support very different loans in different places. Enter a realistic local figure.
Why debts and down payment matter so much
Existing debt has a large effect: because the back-end ratio counts every obligation, a $500 monthly car and student loan payment can take tens of thousands off the price you qualify for, and clearing debt before you apply is often the quickest way to afford more. The down payment does not change your monthly payment or loan size, but it adds directly to the price you can reach.
How the mortgage rate changes the picture
A higher rate raises the monthly cost of every borrowed dollar, so the same PITI budget supports a smaller loan. As a rough guide, each one-point rise in the rate cuts about 10% off the loan a fixed payment can cover. The price you can afford can therefore fall while your income stays the same. A lower rate, whether from locking at the right time, buying discount points or a better credit score, increases your budget.
A worked example
Take a household earning $80,000 a year with $500 of monthly debt payments, $40,000 for a down payment and a 6.5% rate over 30 years, budgeting $400 a month for taxes and insurance. Gross monthly income is about $6,667. The front-end limit is 28% of that, about $1,867. The back-end limit is 36% minus the $500 of debt, about $1,900, so the front-end figure of about $1,867 applies. Subtracting $400 for taxes and insurance leaves about $1,467 for principal and interest, which supports a loan of about $232,000. With the $40,000 down payment, the affordable price is about $272,000.
The gap between qualifying and comfortable
The 28/36 rule marks a maximum. Borrowing right up to it leaves little room for costs the ratios ignore: utilities that grow with square footage, maintenance and repairs, HOA dues, a longer commute and the emergencies every household meets eventually. Many buyers shop below their approved limit so that a job change, a new child or a higher payment on other debt does not turn into a crisis. Buying a house that is affordable on paper but not in practice is a common way a first purchase goes wrong.
Assumptions and limitations
This is a planning estimate, not a mortgage approval. The 28% and 36% ratios and the interest rate are inputs you can change. Lenders apply their own rules, count income differently, and may allow higher ratios for strong applicants or require lower ones for riskier files. The calculator does not model private mortgage insurance, HOA dues, closing costs or the effect of your credit score on your rate. Use it to set a search range, then get a lender pre-approval before you make an offer.
About This 28/36 Rule Calculator
Use this 28/36 rule calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
How much house can I afford on my income?
What is the 28/36 rule?
Does the calculator include property taxes and insurance?
How does my down payment affect what I can afford?
Why does lowering my monthly debts increase what I can afford?
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