How Much House Can I Afford

How Much House Can I Afford?

This Home Affordability Calculator models your income, debts, and down payment to determine the maximum home price you can comfortably afford without risking financial stress.

How It Works

1. Enter your gross annual income, monthly debts (auto loans, student loans), and your available down payment.
2. Input the expected mortgage rate and property taxes.
3. The calculator applies the standard 28/36 rule to find your maximum monthly payment and back-calculates the home price.

Formula & Calculation Logic

$\text{Max Monthly Payment} = \text{Gross Monthly Income} \times 0.28$ $\text{Max Debt-to-Income (DTI)} = \text{Gross Monthly Income} \times 0.36 - \text{Existing Monthly Debts}$ The calculator uses the lower of the two limits to determine your maximum mortgage capacity.

Worked Example

Income: $120,000/year ($10,000/month). Max Housing Payment (28%): $2,800. If you have$500 in other debts, your max housing payment under the 36% rule is ($3,600 -$500) = $3,100. The calculator uses$2,800. With a 7% interest rate and 20% down, you can afford roughly a $350,000 home.

Result Interpretation

• Conservative Limit: Sticking to the 28% rule ensures you aren't "house poor."
• Aggressive Limit: Some lenders allow up to 43% DTI, but this leaves little room for emergencies.

FAQs

What is the 28/36 rule?

It's a financial rule stating you should spend a maximum of 28% of your gross income on housing, and no more than 36% on all debts combined.

Should I use my entire approval amount?

Usually, no. Lenders approve you for the maximum mathematical risk, not what fits your lifestyle.

Sources & Last-Reviewed Date

• Sources: CFPB Affordability Guidelines.
• Last-Reviewed: 2026-09-03