Home Affordability Calculator
How much house can I afford on my salary?
How much house can you really afford? Enter your income and debts: we apply the lender-standard 28/36 rule to find your maximum home price. The front-end ratio caps housing costs (principal, interest, tax, insurance, HOA) at 28% of gross monthly income. Your affordable housing budget is whichever cap is lower, which is why heavy non-housing debt shrinks the home you can buy even with a strong salary.
How much house can you really afford? Enter your income and debts: we apply the lender-standard 28/36 rule to find your maximum home price.
Last updated: October 2026
Your finances
Based on principal and interest only. Property tax, insurance, PMI and HOA will reduce the price you can afford, budget for them separately with our mortgage calculator.
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What is the 28/36 rule?
Lenders qualify borrowers with two debt-to-income ratios. The front-end ratio caps housing costs (principal, interest, tax, insurance, HOA) at 28% of gross monthly income. The back-end ratio caps all monthly debt payments, housing plus car loans, student loans, and minimum credit card payments, at 36%. Your affordable housing budget is whichever cap is lower, which is why heavy non-housing debt shrinks the home you can buy even with a strong salary.
These are conventional-loan guidelines; FHA loans allow higher ratios (often up to 31/43 or more), and some lenders stretch further for strong borrowers. But the ratios exist for a reason, they approximate the payment level at which most households can still save, handle surprises, and avoid default. Treat them as guardrails, not as a dare.
How the maximum price is computed
Once the monthly housing budget is known, the calculator reverses the mortgage payment formula to find the largest loan that budget supports:
Adding your down payment gives the maximum home price. Note this covers principal and interest only, in high-tax areas, property tax and insurance can easily consume 20-30% of the housing budget, so treat this figure as a ceiling and run the mortgage calculator on any specific home.
The costs buyers forget
The mortgage payment is the biggest cost, but not the only one. Closing costs run 2-5% of the purchase price, on a $400,000 home, that is $8,000-$20,000 due at signing. Maintenance averages about 1% of the home's value per year ($4,000 on that same home), and older homes cost more. Then there are moving costs, immediate repairs, furniture, and the property-tax reassessment that often follows a sale, your tax bill may be based on the price you paid, not what the previous owner paid.
First-time buyers should also budget a cash reserve: three to six months of housing payments sitting untouched after closing. Lenders like seeing reserves, and you will sleep better when the water heater fails in month two.
Affordable vs. maximum
The maximum is not a target. It assumes stable income, no major repairs, and no lifestyle spending beyond debts. Many financial planners suggest keeping housing closer to 20-25% of income so one surprise, a roof, a job change, a rate reset, does not become a crisis. Use the maximum to set your search ceiling, then shop comfortably below it.
Tips for stretching affordability safely
Kill other debts first. Because the back-end ratio counts every debt payment, paying off a $400/month car loan can raise your buying power by roughly $130,000 in loan amount. It is the highest-leverage move most buyers can make.
A bigger down payment beats a bigger price. More down means a smaller loan, no PMI, and often a better rate, three wins at once. Even 5% extra down can change the math meaningfully.
Consider a rate buydown. Seller-paid buydowns (like a 2-1 buydown, where the rate is 2 points lower in year one and 1 point lower in year two) can ease the early years of ownership without changing the home price.
Do not skip the inspection to win a bid. In hot markets buyers waive inspections to compete, but a $500 inspection routinely uncovers five-figure problems. An "affordable" house with a failing foundation is not affordable.
Worked example: what $120,000 of income buys
With $120,000 of gross annual income, the 28% front-end rule caps housing at $33,600 a year, or $2,800 a month. The 36% back-end rule caps all debt at $43,200 a year, or $3,600 a month. If you already pay $400 a month on a car and $300 on student loans, the back-end rule allows $3,600 minus $700, which is $2,900 for housing. The tighter of the two caps wins, so the housing budget is $2,800 a month.
Turning that budget into a price: if about 70% can go to principal and interest after taxes and insurance ($1,960 a month), then at 6.5% over 30 years that supports a loan of about $310,093. With 20% down, the target home price is roughly $387,617. Change any input, the down payment, the rate, the other debts, and the ceiling moves with it, which is exactly what the calculator above lets you test.
The 28/36 rule, applied step by step
Lenders judge affordability with two ratios. The front-end ratio (housing costs divided by gross income) should stay at or under 28%. Housing costs mean PITI: principal, interest, property tax, and insurance, plus HOA dues and PMI where they apply. The back-end ratio (all monthly debts divided by gross income) should stay at or under 36%, and here "all debts" means the housing payment plus car loans, student loans, and minimum credit card payments.
Apply it to the $120,000 example: front-end gives $2,800 for housing. Back-end gives $3,600 for everything, minus $700 of existing debt, which is $2,900 for housing. The binding constraint is the smaller number, $2,800. Note what the rules use: gross income, not take-home pay, and minimum payments, not balances. For the full deep dive, see our guide How Much House Can I Afford?.
Affordability FAQs
What is the 28/36 rule?
Housing costs at most 28% of gross monthly income; all debts at most 36%. Lenders use these ratios to qualify borrowers, and this calculator applies both, using the lower result. FHA loans allow higher ratios, but the 28/36 caps are a prudent ceiling for most buyers.
How much income do I need to buy a $400,000 house?
At 6.5% with 20% down, expect roughly $2,540/month in housing costs, implying about $109,000 annual income under the 28% rule, before other debts. Enter your exact numbers above for a personalized figure.
Do lenders use gross or net income?
Gross (pre-tax) income. This calculator does the same. That means the ratios already assume taxes and other deductions come out of the remaining 64%+ of your income, one reason to treat the maximum as a ceiling, not a target.
Should I buy the maximum home I can afford?
Usually not. The max assumes everything goes right. Targeting 20-25% of income on housing leaves room for repairs, rate changes, and real life. Use the maximum to set your search ceiling, then shop comfortably below it.
How much should I save for a down payment?
Twenty percent avoids PMI on a conventional loan, but many buyers put down 5-10% and pay PMI temporarily, waiting years to save 20% while prices rise can cost more than PMI does. Also budget 2-5% of the price for closing costs plus a 3-6 month cash reserve on top of the down payment.
What are closing costs and how much are they?
Closing costs are the fees due at signing: lender origination charges, appraisal, title insurance, prepaid taxes and insurance, and recording fees. Expect 2% to 5% of the purchase price, $8,000 to $20,000 on a $400,000 home. Sellers can sometimes contribute, and lenders must disclose them on the Loan Estimate.
What counts as debt in the 36% back-end ratio?
Lenders count recurring monthly obligations: car loans, student loans, personal loans, and minimum credit card payments, plus the proposed housing payment itself. They do not count utilities, groceries, subscriptions, or income tax. In our example, $400 of car payments plus $300 of student loans is the $700 of existing debt that tightens the back-end cap.
Does the 28% rule include property taxes and insurance?
Yes. The 28% cap applies to the full PITI payment: principal, interest, property tax, and homeowner's insurance, plus HOA dues and PMI when they apply. Many buyers budget 28% for principal and interest alone, then discover taxes and insurance push them well past the guideline. Always budget the whole payment.
Can I afford a house while I still have student loan debt?
Yes, through the back-end ratio. Student loan payments simply reduce what is left for housing: with $300 a month in student loans on a $120,000 income, the 36% rule leaves $2,900 for housing instead of $3,600. Large student balances are the most common reason buyers qualify for less than the 28% rule alone would suggest.
How does my down payment change what I can afford?
Two ways. A bigger down payment shrinks the loan, which shrinks the payment: on a $387,617 home at 6.5%, 20% down means $1,960 a month of principal and interest, while 10% down means $2,205, and the smaller down payment also adds PMI on top. A bigger down payment also protects you if prices dip, since you start with more equity.
What costs do first-time buyers forget?
Closing costs, moving expenses, immediate repairs, and furnishings hit in the first months of ownership. Ongoing, budget for maintenance, roughly 1% of the home's value per year, plus higher utility bills and possible HOA dues. This calculator focuses on the purchase price ceiling, so keep a separate cash cushion for everything around it.