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Home Affordability Calculator

Lenders judge affordability with two ratios: housing costs should stay under 28 percent of gross income, and total debt under 36 percent. Enter your income and debts to see the maximum monthly payment, loan and home price those rules allow.

Estimates only. This tool is provided for educational purposes and is not financial advice. It models the figures you enter — it does not know your credit terms, local taxes, or fees. Talk to a licensed adviser before making a decision.

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How to use the home affordability calculator

  1. Enter your gross annual income before tax.
  2. Enter your monthly debt payments (car loan, cards, student loans) excluding mortgage.
  3. Enter an estimated mortgage rate, loan term and down payment.
  4. Add annual property tax and home insurance.
  5. Read the maximum monthly payment, loan and home price the 28/36 rule allows.

Worked example

With $80,000 income, $500 monthly debt and a 6.5% 30-year loan, the 28% rule caps housing at $1,867 a month and the 36% rule (minus debt) at $1,900. The tighter cap funds a mortgage of about $286,000, and with a $40,000 down payment you can afford a home near $326,000.

The 28/36 rule

Housing cap (28%) = 0.28 x Gross monthly income

Housing cap (36%) = 0.36 x Income - Monthly debts

Mortgage pmt = Cap - Tax/12 - Ins/12

Loan = pmt x (1-(1+r)^-n)/r · r=rate/1200, n=term x 12

The calculator keeps the tighter of the two caps, then backs out tax and insurance before turning the payment into a loan and adding your down payment. Lenders may also weigh credit score, reserves and HOA fees, which this estimate does not include.

Frequently asked questions

What is the 28/36 rule?

It is a lending guideline: keep housing costs at or below 28 percent of gross income, and total debt payments at or below 36 percent.

Which cap does the calculator use?

It uses the tighter (lower) of the two caps so you stay inside both the 28 percent and 36 percent limits.

Does it include PMI?

Not by default. If your down payment is under 20 percent you may owe PMI, which would lower the price you can afford.

Why subtract tax and insurance?

The 28/36 caps cover total housing cost (PITI). Tax and insurance are removed so the remaining payment can be turned into a loan amount.

Is this the price a lender will approve?

It is a planning estimate. The actual approval also depends on credit score, reserves, HOA dues and the specific loan program.

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