Home Affordability Calculator
Find the home price you can actually afford using the 28/36 rule lenders apply, including property tax, insurance, PMI and HOA — not just the loan payment.
Cards, auto, student loans, child support.
Annual, as a % of home value. Varies hugely by county.
The share of gross income going to all debt. Lenders often allow 45%; 36% is what keeps you comfortable.
Your limit here comes from the back-end ratio. Your existing debts are what is holding the number down — paying one off raises your budget more than shopping for a better rate.
Two ceilings, and the lower one wins
Lenders check your income against two separate limits, and whichever binds first sets your budget.
Front-end: 28% of gross monthly income for housing alone — mortgage, property tax, insurance, HOA, PMI.
Back-end: 36% of gross monthly income for all your debt combined, housing included. Car payment, student loans, credit card minimums and child support all count.
If you carry meaningful monthly debt, the back-end limit is what caps you, and the calculator says which one is doing the work. That distinction changes your next move entirely: if the back-end ratio is the constraint, paying off a car loan raises your budget more than finding a better mortgage rate will.
Why the answer is lower than you hoped
Two reasons, both of which simpler calculators hide.
First, this includes the full payment, not just principal and interest. Property tax, homeowners insurance, PMI and HOA dues frequently add 25–40% on top of the loan payment. Budgeting from a principal-and-interest quote and discovering escrow later is the classic first-time-buyer error.
Second, the ratios are calculated on gross income. 36% of pre-tax income can be closer to 45% of what actually reaches your bank account.
The 20% down threshold is a real cliff
Below 20% down you pay private mortgage insurance — typically around 0.5% of the loan annually, with no equity benefit to you at all. It is pure cost, and it directly reduces the home price you can afford.
If you are close to 20%, waiting a few months to cross it often buys you more house than a rate drop would. Run it both ways above and compare.
Property tax varies more than anything else here
The default rate is a placeholder. Effective property tax rates range from under 0.4% of home value in some states to over 2% in others — on a $400,000 home that is a swing of roughly $530 a month.
Do not accept the default. Look up the actual rate for the county you are buying in, and if you can, the specific parcel. Two otherwise identical houses on opposite sides of a county line can differ by hundreds of dollars a month.
What to add on top before you commit
- Closing costs, 2–5% of the price, paid at closing.
- Maintenance, commonly budgeted at 1% of home value per year.
- Cash reserves. Lenders want to see them, and an empty account after closing is how a manageable mortgage becomes an unmanageable one.
How this is calculated
Front-end limit = 28% of gross monthly income (housing costs) Back-end limit = 36% of gross monthly income − existing debt payments Monthly budget = the lower of the two Then solve for the home price whose total payment equals that budget: payment = principal & interest + property tax/12 + insurance/12 + HOA + PMI
Frequently asked questions
- What is the 28/36 rule?
- A long-standing underwriting benchmark. Housing costs should stay under 28% of gross monthly income, and all debt payments combined under 36%. Many lenders will approve higher — 43% or even 45% back-end is common — but 28/36 is the level that leaves room to absorb a surprise.
- Why is your number lower than what my lender approved?
- Lenders quote the maximum they will lend, which is a different question from what you can comfortably carry. Approval at 45% of gross income leaves very little slack for maintenance, a car repair or a period of reduced income. Use the conservative setting as your target and the maximum as an upper bound.
- Does this include closing costs?
- No. Closing costs typically run 2–5% of the purchase price and are paid separately from your down payment, so budget for them on top. Your down payment also should not be your entire savings — lenders like to see reserves, and so should you.
- How does my down payment change what I can afford?
- In two ways. A larger down payment reduces the loan, which lowers the payment. And crossing 20% removes PMI entirely, which can free up a couple of hundred dollars a month — often worth more than a small rate improvement.
- Should I use gross or take-home income?
- Gross, before taxes. That is what lenders use, which is also why their ratios feel generous — 36% of gross can be closer to 45% of what actually lands in your account.