House Affordability Calculator
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- Formula shown
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You could afford a home of about $345,091 with $60,000 down: a $285,091 loan and $2,333.33 a month for housing.
- Principal and interest
- $1,801.97
- Property tax
- $287.58
- Home insurance
- $125.00
- PMI
- $118.79
- Other debts
- $500.00
28% / 36% is a rule of thumb used for conventional loans; lenders also weigh credit score, savings and loan type (FHA’s benchmarks are 31% / 43%). The maximum is a ceiling, not a target: it leaves nothing for repairs or saving.
How to use the house affordability calculator
- Enter your gross yearly household income and your monthly payments on other debts, such as car loans, student loans and card minimums.
- Enter the cash you will put down, the mortgage rate you expect and the loan term.
- Set the property tax rate for the area, your home insurance estimate, any HOA fee and a PMI rate in case you put down less than 20%.
- Keep the 28% / 36% limits or enter the ones your lender or loan program uses.
How the maximum price is found
Housing cost(price) = k × (price − down) + tax % × price ÷ 12 + insurance ÷ 12 + HOA + PMI
Maximum price: housing cost(price) = housing cap
The front-end ratio is housing costs divided by gross monthly income. The back-end ratio adds your other monthly debts. The lower of the two caps sets the most you can spend on housing. k is the monthly payment per dollar borrowed at your rate and term (from the standard amortization formula). Since every cost rises with the price, the calculator solves for the price that uses the cap exactly. PMI is added only while the loan is over 80% of the price. If PMI would push you over the cap, the answer stops at the price where your down payment is exactly 20%.
Worked example
A household earning $100,000 a year has $8,333.33 a month. At 28%, housing can take $2,333.33. At 36%, after $500 of other debts, it could take $2,500.00, so the 28% housing limit binds. With $60,000 down at 6.5% for 30 years, 1% property tax, $1,500 insurance and 0.5% PMI, the maximum price is $345,091, on a $285,091 loan.
At that price the payment is $1,801.97 principal and interest, $287.58 tax, $125.00 insurance and $118.79 PMI: a total of $2,333.33. The back-end ratio is 34%. Raise the other debts to $1,000 a month and the 36% limit takes over, dropping the maximum to $301,062. Rates matter as much as income: at 5.5% the same household could reach $371,543, and at 7.5% only $321,865.
Maximum price by income
$60,000 down, 6.5% for 30 years, 1% property tax, $1,500 insurance, 0.5% PMI and 28% / 36% limits.
| Gross income | No other debts | $750 a month of debts |
|---|---|---|
| $60,000 | $231,233 | $182,309 (36% binds) |
| $80,000 | $296,464 | $266,178 (36% binds) |
| $100,000 | $345,091 | $334,084 (36% binds) |
| $125,000 | $422,143 | $422,143 |
| $150,000 | $499,194 | $499,194 |
| $200,000 | $653,298 | $653,298 |
What lenders look at besides these ratios
- Limits vary by loan type. 28% / 36% is a long-standing conventional rule of thumb. Automated underwriting often allows a back-end ratio in the mid-40s or higher for strong files. FHA's standard benchmarks are 31% / 43%. Treat any ratio as editable, not a law.
- Credit score moves the rate. A higher score can lower your rate and PMI, which raises the price you qualify for. Try a few rates to see the range.
- Cash beyond the down payment. You also need closing costs (often 2% to 5% of the price) and, for some loans, reserves. Check the total with the down payment calculator.
- Qualifying is not the same as comfortable. The ratios ignore taxes taken from your pay, childcare, saving for retirement and repairs. Many buyers aim well below the maximum.
Once you have a target price, the mortgage calculator breaks down the payment and schedule. The rent vs buy calculator shows whether buying beats renting over the years you plan to stay. Comparing loan types? See the FHA and VA calculators.
Frequently asked questions
How much house can I afford on $100,000 a year?
With $60,000 down, $500 a month of other debts, a 6.5% 30-year loan, 1% property tax, $1,500 insurance and 0.5% PMI, the 28/36 rule gives a maximum price of about $345,000, with a housing payment of $2,333.33 a month. Lower rates or a bigger down payment raise it.
What is the 28/36 rule?
It is a lending guideline: housing costs (principal, interest, property tax, insurance, PMI and HOA) should be no more than 28% of gross monthly income, and housing plus all other debt payments no more than 36%. The lower of the two limits sets how much you can spend.
Which debts count in the debt-to-income ratio?
Recurring debt payments that show on a credit report or court order: car loans, student loans, minimum credit-card payments, personal loans, child support and alimony. Rent you will stop paying, utilities, phone bills and groceries are not included.
How much does the interest rate change what I can afford?
A lot. In the example household earning $100,000, the maximum price is about $371,500 at 5.5%, $345,100 at 6.5% and $321,900 at 7.5%. Each percentage point is worth roughly $25,000 of house at that income.
Can I get a mortgage with a higher debt-to-income ratio?
Often, yes. Conventional loans run through automated underwriting can accept back-end ratios in the mid-40s or higher with good credit and savings, and FHA uses 31% and 43% as its standard benchmarks. A higher ratio means a tighter budget, so check the payment against your real spending.