Last updated: May 2026
Find out exactly how much house you can afford based on your income, debts, and interest rate — instantly.
Your Finances
Results
Affordability by Home Price
| Home Price | Down Pmt (current) | Loan Amount | Monthly P&I | Total Pmt | Front-End Ratio |
|---|
The 28/36 Rule: Most lenders use two ratios. The front-end ratio limits your monthly housing costs (P&I + tax + insurance) to 28% of gross monthly income. The back-end ratio (DTI) limits total debt payments (housing + car + student loans + credit cards) to 36% of gross income.
Max home price calculation: We find the maximum monthly P&I payment that keeps both ratios within limits, then back-calculate the home price using your interest rate, term, and down payment.
Important: Lenders may allow DTI up to 43–50% for FHA or VA loans. This calculator uses the conservative conventional standard. Your actual limit depends on credit score, loan type, and lender.
⚠️ These are estimates based on the 28/36 rule. Actual loan approval depends on credit score, employment history, loan type, and lender requirements. Consult a licensed mortgage professional before making home-buying decisions.
This calculator applies the 28/36 rule - the standard debt-to-income (DTI) guideline used by most conventional mortgage lenders when evaluating loan applications.
The front-end ratio covers your total housing payment including principal, interest, taxes, and insurance. The back-end ratio adds all other recurring debt: car loans, student loans, credit card minimums, and any other monthly obligations.
Worked example: $90,000 annual income ($7,500/month gross). Maximum housing payment: $7,500 x 28% = $2,100. Maximum total debt: $7,500 x 36% = $2,700. If you have $600/month in other debt, you have $2,100 remaining for housing. At 6.75% for 30 years with 20% down, a $2,100 monthly P&I payment supports a home price of roughly $315,000-$330,000.
The 28/36 rule is the standard guideline lenders use to evaluate mortgage affordability. Your monthly housing costs (principal, interest, taxes, insurance) should not exceed 28% of your gross monthly income. Your total monthly debt - housing plus car loans, student loans, and credit cards - should not exceed 36%. Lenders may approve loans up to 43-50% back-end DTI for strong credit profiles, but 36% is the conservative benchmark for long-term financial health.
Conventional loans require as little as 3% down, but 20% down eliminates PMI and gives you the best interest rates. FHA loans allow 3.5% down with a credit score of 580 or higher. VA loans for veterans and USDA loans for rural areas allow 0% down. Budget for closing costs of 2-5% of the loan amount on top of your down payment when planning your total cash needed.
Conventional loans typically require a 620 or higher credit score. FHA loans accept scores as low as 580 with 3.5% down or 500 with 10% down. The best mortgage rates generally require a 740 or higher score. Each 20-point improvement in your score can reduce your rate by 0.1-0.25%, which translates to thousands of dollars over the life of the loan.
The 28% front-end guideline is conservative. Many lenders approve up to 31-36% front-end DTI for borrowers with excellent credit and stable income. However, staying below 28% leaves buffer for unexpected home expenses, maintenance costs (budget 1-2% of home value annually), and income disruptions. Lender approval and personal financial comfort are separate questions worth considering independently.
Home affordability is not just about what a lender will approve — it is about what you can comfortably carry without straining your financial life. The 28/36 rule is the foundational guideline: spend no more than 28% of your gross monthly income on total housing costs (principal, interest, taxes, and insurance — commonly abbreviated PITI), and no more than 36% of gross income on all monthly debt obligations combined. These thresholds are not arbitrary; they reflect decades of default data showing that borrowers who exceed them face significantly higher financial stress and default risk when income disruptions occur.
Lenders evaluate two debt-to-income (DTI) ratios. The front-end ratio covers only housing costs and is capped at 28% by conventional guidelines (though lenders sometimes approve up to 31–36% for strong credit profiles). The back-end ratio adds all recurring debts — car loans, student loans, credit card minimums, child support — and is capped at 36% conservatively, though lenders may approve up to 43–50% for borrowers with excellent credit and stable income. The gap between what a lender will approve and what is financially comfortable can be significant; being "approved" for a $600,000 mortgage does not mean it is a sound financial decision for your specific income, savings rate, and financial goals.
| Annual Income | Max Home Price (28% rule) | Max Home Price (36% rule) | Monthly Payment |
|---|---|---|---|
| $60,000 | $196,000 | $168,000 | $1,400 |
| $80,000 | $261,000 | $224,000 | $1,867 |
| $100,000 | $326,000 | $280,000 | $2,333 |
| $120,000 | $391,000 | $336,000 | $2,800 |
| $150,000 | $489,000 | $420,000 | $3,500 |
| $200,000 | $652,000 | $560,000 | $4,667 |
Assumes 20% down payment, 6.75% interest rate, 30-year fixed mortgage. Max home prices are approximate and exclude taxes and insurance.
What is the 28/36 rule for mortgages?
The 28/36 rule is the standard affordability guideline used by conventional mortgage lenders. The "28" means your monthly housing costs — principal, interest, property taxes, and homeowner's insurance (PITI) — should not exceed 28% of your gross monthly income. The "36" means all monthly debt payments combined (housing plus car loans, student loans, credit card minimums, and other obligations) should not exceed 36% of gross monthly income. Staying within these thresholds reduces financial stress and improves loan approval odds at the best rates.
How much house can I afford on my salary?
A rough rule of thumb is that you can afford a home priced at 3–5 times your annual gross income, depending on your down payment, interest rate, and existing debts. At current rates (6.75%), a more precise estimate uses the 28% front-end rule: multiply your annual income by 0.28 and divide by 12 to get your maximum monthly housing budget, then back into a home price using a mortgage calculator. The table above provides pre-calculated estimates by income level assuming 20% down and a 30-year fixed rate.
Does the down payment affect affordability?
Yes, in multiple ways. A larger down payment reduces your loan balance, which directly lowers your monthly payment and allows you to afford a higher-priced home within the same DTI limit. Putting down 20% or more eliminates private mortgage insurance (PMI), which typically costs 0.5–1.5% of the loan amount annually ($1,500–$4,500/year on a $300k loan). A larger down payment also typically qualifies you for lower interest rates, further reducing your monthly cost. However, depleting savings entirely for a down payment creates risk — maintain at least 3–6 months of expenses as an emergency reserve.
What is front-end vs. back-end DTI?
Front-end DTI (also called the housing ratio) measures only housing costs as a percentage of gross monthly income. It includes mortgage principal and interest, property taxes, homeowner's insurance, and HOA fees if applicable. Back-end DTI (also called total DTI) includes all recurring monthly debt obligations: housing costs plus car loans, student loans, personal loans, alimony, child support, and minimum credit card payments. Lenders evaluate both ratios; back-end DTI is typically the binding constraint for borrowers with significant non-housing debt.
How do lenders calculate maximum mortgage?
Lenders calculate maximum mortgage by working backward from your DTI limits. They take your gross monthly income, multiply it by the maximum allowable back-end DTI (often 43–45% for conventional loans, up to 50% for FHA loans), then subtract all existing monthly debt payments. The remainder is your maximum allowable housing payment. From that number they subtract estimated property taxes and insurance to determine the maximum P&I payment, then use current interest rates and your desired loan term to calculate the maximum loan amount and, with your down payment added, the maximum purchase price.