🏡Your Finances
$
$20,000$500,000
Monthly gross: $7,917
$
$0$5,000
Car loans, student loans, minimum credit card payments, etc.
$
$0$500,000
📐Loan Assumptions
%
3.000%12.000%
$
$0$20,000
$
$0$5,000
Find your maximum home price using the 28/36 rule. Enter your income, debts, and down payment for an instant estimate.
Monthly gross: $7,917
Car loans, student loans, minimum credit card payments, etc.
The Home Affordability Calculator estimates the maximum home price you can comfortably afford based on your gross income, existing monthly debts, down payment, interest rate, and loan term.
It applies the 28/36 rule used by most conventional lenders — capping housing costs at 28% of gross monthly income and total debt payments at 36% — then works backward to find the largest home price that fits within both limits after accounting for property taxes, insurance, and PMI.
Max Housing Payment = min(0.28 × Gross Monthly Income, 0.36 × Gross Monthly Income − Other Debts)The lower of the two limits sets your maximum monthly housing payment. The calculator then subtracts estimated taxes, insurance, and PMI to find the portion available for principal & interest, and works backward through the mortgage formula to estimate your maximum loan — and home price.
Example 1: $95,000 income, $400 in monthly debts
Gross monthly income ≈ $7,917. 28% cap = $2,217/mo housing; 36% cap = $2,850 − $400 = $2,450/mo. The lower cap ($2,217) applies.
With $60,000 down at 6.875% over 30 years, this supports a home price of roughly $390,000–$410,000 after taxes and insurance.
Example 2: Same income, but $800/mo in car & student loan payments
28% cap stays at $2,217/mo, but 36% cap drops to $2,850 − $800 = $2,050/mo — now the more restrictive limit.
Maximum affordable home price falls by roughly $30,000–$40,000 compared to Example 1, showing how existing debt directly shrinks buying power.
Methodology
Uses the standard 28/36 debt-to-income guideline. Front-end ratio: housing costs ≤ 28% of gross monthly income. Back-end ratio: total debts ≤ 36%. Maximum home price uses the more restrictive of the two, minus estimated monthly taxes and insurance.
The 28/36 rule is a widely-used debt-to-income guideline. It says your housing costs (mortgage, taxes, insurance) should not exceed 28% of gross monthly income, and your total monthly debts (housing + car loans + student loans + credit cards) should not exceed 36%. Most conventional lenders use this as a baseline.
No — many programs allow less. Conventional loans allow 3–5% down. FHA loans allow 3.5% with a 580+ credit score. VA loans allow 0% down for veterans. USDA loans allow 0% down in eligible rural areas. However, less than 20% down typically requires PMI, which adds to your monthly payment.
Your credit score directly affects your interest rate. Moving from a 680 to a 760 score could reduce your rate by 0.5–1%, saving thousands over the loan life. The difference between a 6.5% and 7.5% rate on a $350K loan is about $224/month — or $80,640 over 30 years.
Disclaimer: Calculations are for informational purposes only and do not constitute professional financial advice. Please consult with a certified professional before making financial decisions.