Find out how much house you can comfortably afford using the same 28/36 debt-to-income rules that mortgage lenders use to qualify borrowers.
Enter your gross monthly income, monthly debt payments, planned down payment, and loan terms. We'll show your maximum and recommended home price using the 28/36 rule.
The most expensive financial mistake first-time homebuyers make isn't picking the wrong loan or skipping the inspection — it's buying too much house. When your mortgage payment swallows 40% or more of your income, every other part of your life suffers: retirement savings stall, emergencies become catastrophes, and that beautiful home starts feeling like a financial trap.
This calculator answers two related questions. Maximum home price shows the absolute upper limit a lender will likely approve based on your income and debts. Recommended home price shows what most financial planners would call comfortable — a payment you can sustain through job changes, medical bills, and rising costs without panic.
Both numbers use the time-tested 28/36 rule, the same framework used by Fannie Mae, Freddie Mac, and most conventional lenders. Understanding this rule before house-hunting puts you in control of the conversation when you sit down with a loan officer.
The 28/36 rule is the gold standard for mortgage affordability. It has two parts:
The "front-end" rule limits what you spend on housing alone. The "back-end" rule includes housing plus everything else — car loans, student loans, minimum credit card payments, alimony, child support. A loan that fits both ratios is considered safe; one that breaks either ratio is considered risky for both you and the lender.
Some loan programs allow ratios up to 43% or even 50% (especially FHA and VA loans), but lenders will typically charge higher rates and require compensating factors like larger down payments or significant savings reserves. The 28/36 framework remains the safest baseline.
Let's see how the calculator arrives at its numbers. Suppose you earn $96,000 per year ($8,000/month gross), have $500 in monthly debts (car payment), can put $50,000 down, and rates are at 6.5% for a 30-year loan with 1.2% property tax.
The front-end (28%) gives $2,240. The back-end (36%) gives $2,380. We use the lower number: $2,240/month maximum housing payment.
Working backward from a $1,740 P&I payment at 6.5% over 30 years gives a maximum loan of approximately $275,000. Add the $50,000 down payment:
Maximum home price: ~$325,000 (Recommended for comfort: ~$280,000)
This calculator shows two prices because the maximum a bank will lend you and what's actually wise to spend are rarely the same number. Here's the difference:
| Approach | Housing Ratio | What It Means |
|---|---|---|
| Maximum (28%) | 28% of gross income | Upper limit lenders allow; no cushion for emergencies |
| Recommended (25%) | 25% of gross income | Comfortable; leaves room for savings, medical, repairs |
| Conservative (20%) | 20% of gross income | Very safe; aggressive saver-friendly; smaller home |
The 3% gap between maximum and recommended is enormous in monthly terms. On an $8,000/month income, that's $240 every month — over $86,000 across a 30-year loan — that you'd otherwise direct toward retirement, your kids' college, or simply enjoying life.
To give you a sense of what's typical, here are estimated home prices at different income levels assuming 20% down, 6.5% rate, 30-year term, $300/month in other debts, and 1.2% property tax:
| Annual Income | Max Home Price | Recommended | Conservative |
|---|---|---|---|
| $50,000 | $172,000 | $153,000 | $122,000 |
| $75,000 | $262,000 | $233,000 | $186,000 |
| $100,000 | $352,000 | $313,000 | $250,000 |
| $125,000 | $442,000 | $393,000 | $314,000 |
| $150,000 | $532,000 | $473,000 | $378,000 |
| $200,000 | $712,000 | $633,000 | $506,000 |
These are rough estimates. Your actual affordability depends on your specific debts, credit score, down payment, and local property tax rates (which can range from 0.3% in Hawaii to over 2% in New Jersey).
The 28/36 rule is a financial floor, not a lifestyle ceiling. Just because you qualify for a $400,000 home doesn't mean you'll be happy in one. Before maxing out, ask yourself:
Once you have a target home price from this calculator, plug it into our Mortgage Payment Calculator to see the exact monthly payment and total interest. Together, these two tools give you the complete affordability picture before you ever talk to a real estate agent.
The 28/36 rule is a guideline most lenders use to evaluate borrowers. Housing costs (principal, interest, taxes, insurance) should not exceed 28% of your gross monthly income (the "front-end" ratio), and total debt payments — housing plus car loans, student loans, credit cards, and other obligations — should not exceed 36% (the "back-end" ratio). Loans within these limits are considered safer for both you and the lender.
On $100,000 annual income with no other debts, you can typically afford a home around $350,000 to $420,000 — depending on your down payment, interest rate, and local property taxes. With $500/month in existing debt payments, that range drops to roughly $290,000 to $350,000. With $1,000/month in existing debts, you'd be looking at approximately $230,000 to $280,000. The calculator above gives you a precise number for your specific situation.
Almost never. Lenders calculate the maximum you can borrow based on debt ratios, but they don't account for your lifestyle, savings goals, family size, or future plans. Most financial advisors recommend buying a home that costs no more than 80% of what the bank says you can afford. This leaves room for emergencies, retirement savings, life changes, and the unexpected costs of homeownership (repairs, taxes increases, utilities). The "recommended" number on this calculator reflects this safer approach.
Yes, in two important ways. First, a larger down payment directly increases the home price you can afford because the loan amount is smaller. Second, putting at least 20% down eliminates PMI, which can save $100–$300/month — money you can put toward a bigger mortgage instead. A buyer with $80,000 down on $100k income can typically afford 30%–40% more home than a buyer with only $20,000 down at the same income.
Lenders use your gross monthly income — what you earn before taxes and deductions. This includes salary, hourly wages, regular bonuses (averaged), commissions (with a 2-year history), self-employment income (averaged from tax returns), Social Security, pensions, alimony, and rental income. Irregular income like one-time bonuses, recently-started side businesses, or gambling winnings typically doesn't count.
The back-end ratio includes minimum monthly payments on all reportable debts: car loans and leases, student loans (even if deferred), credit card minimum payments, personal loans, child support, alimony, and any other court-ordered payments. It does NOT include utilities, groceries, insurance not financed (like auto/health), 401(k) contributions, or anything you pay in cash without a credit obligation.
The principle applies everywhere — limit housing costs to a sustainable share of income — but the specific percentages vary. UK lenders typically use a 4–4.5x annual income multiplier rather than ratios. Canadian lenders use the GDS (Gross Debt Service) and TDS (Total Debt Service) ratios, similar to 28/36 but often allowing up to 39%/44%. Australia, India, and other countries have their own conventions. The numbers from this calculator are most accurate for US buyers but provide a good safety check anywhere.
Usually within 5–10%. Lenders may approve you for slightly more (using their full risk model and compensating factors like savings reserves) or slightly less (if they spot something in your credit report). The maximum number from this calculator is a strong reference — if your pre-approval comes in much higher, take it as a warning that the lender is being aggressive, not as permission to spend more.