Home Affordability Calculator
How much house can you afford? Enter your income, debts, and down payment to get an instant estimate based on the 28/36 rule — the industry-standard guideline lenders use to determine your borrowing power.
Monthly Mortgage (P&I)
$0
Principal and interest payment on your loan.
Monthly Property Tax
$0
Estimated based on the property tax rate you entered.
Monthly Insurance
$0
Homeowners insurance premium spread monthly.
Total Monthly Housing Cost
$0
Your complete PITI payment (Principal, Interest, Taxes, Insurance).
Your Debt-to-Income Ratios
Ready to Start Saving for Your Home?
Knowing what you can afford is the first step. Track your savings, budget, and down payment progress with our Notion Budget Tracker — designed to help you reach your home-buying goals faster.
Get the Notion Budget Tracker →What Is the 28/36 Rule?
The 28/36 rule is a widely used guideline that lenders use to determine how much mortgage you can qualify for. It consists of two ratios:
- 28% Rule (Front-End Ratio) — Your total monthly housing costs (mortgage payment, property taxes, and insurance) should not exceed 28% of your gross monthly income.
- 36% Rule (Back-End Ratio) — Your total monthly debt payments (housing costs plus all other debts like car loans, student loans, and credit cards) should not exceed 36% of your gross monthly income.
This calculator uses the more conservative of these two limits to ensure the recommended home price is realistic and sustainable for your budget.
How This Calculator Works
- Enter your financial details — annual income, existing debts, down payment, and loan preferences.
- We calculate your maximum monthly housing budget — using the 28/36 rule to find the lower of the two limits.
- We subtract taxes and insurance — to find how much is available for your actual mortgage payment (principal + interest).
- We reverse-calculate the loan amount — using the mortgage payment formula to determine the maximum loan you can support.
- We add your down payment — to give you the total home price you can afford.
Tips for First-Time Home Buyers
- Save at least 20% for a down payment — this avoids Private Mortgage Insurance (PMI), which adds $100-$300/month to your costs.
- Factor in closing costs — typically 2-5% of the home price. Do not spend your entire savings on the down payment.
- Get pre-approved before shopping — a pre-approval letter from a lender shows sellers you are a serious buyer and locks in your rate.
- Keep an emergency fund — homeownership comes with unexpected expenses. Aim for 3-6 months of housing costs in savings.
- Consider all costs of ownership — HOA fees, maintenance (1% of home value/year), utilities, and potential repairs are not included in PITI.
- Do not max out your budget — just because you can afford a certain price does not mean you should. Leave room for other financial goals.
Related Tools
- 50/30/20 Budget Calculator — Split your income into needs, wants, and savings
- Savings Goal Calculator — Plan how long it takes to save for your down payment
- Debt Payoff Calculator — See how fast you can eliminate debts before buying
- Rent vs. Buy Calculator — Compare the true cost of renting versus buying
Frequently Asked Questions
What income should I use — gross or net?
Use your gross (pre-tax) income for this calculator. Lenders use gross income when calculating debt-to-income ratios. This is different from the 50/30/20 budget calculator, which uses net income.
Does this include PMI (Private Mortgage Insurance)?
This calculator does not include PMI. If your down payment is less than 20% of the home price, most lenders require PMI, which typically costs 0.5%-1% of the loan amount per year. This would reduce the home price you can actually afford.
Why are there two DTI ratios?
The front-end ratio (28%) looks only at housing costs to ensure your home is affordable on its own. The back-end ratio (36%) considers all debts to make sure your total financial obligations remain manageable. Lenders check both — you must pass both limits to qualify.
Can I afford more than this calculator says?
Some lenders allow DTI ratios up to 43% or even 50% for qualified borrowers. However, the 28/36 rule is considered the safe standard. Stretching beyond it increases your risk of financial stress, especially if interest rates rise or your income changes.
How does the interest rate affect affordability?
Interest rates have a massive impact. For example, on a $300,000 loan over 30 years, going from 6% to 7% increases your monthly payment by about $200. Even a 0.5% rate difference can change your maximum affordable home price by $20,000-$30,000.