Home Affordability Calculator

Lenders generally use the 28/36 rule: your total housing payment (principal, interest, tax, insurance, HOA) should stay under 28% of your gross monthly income, and all debt payments combined — housing plus car loans, student loans, credit cards — should stay under 36%. For example, on a $90,000 salary ($7,500/month) with $400 in monthly debts, the 28% cap is $2,100/month and the 36% cap minus debts is $2,300/month, so your housing budget is the lower figure, $2,100/month. That budget, combined with your down payment, interest rate, and loan term, determines the maximum home price you can afford.

Assume $70,000/year ($5,833/month), $400 in monthly debts, a $40,000 down payment, a 6.5% rate, and a 30-year loan. Front-end cap: $5,833 × 0.28 = $1,633/month. Back-end cap: $5,833 × 0.36 − $400 = $1,700/month. The lower value, $1,633/month, is your housing budget. After subtracting estimated property tax and insurance, roughly $1,400/month is left for principal and interest, which supports a loan of about $221,000 at 6.5% over 30 years — so with the $40,000 down payment, a maximum home price near $261,000. Use the calculator above with your exact numbers for a precise figure.

The 28/36 rule is the classic mortgage-affordability guideline used by conventional lenders. The "28" is the front-end ratio: your total monthly housing payment (principal, interest, property tax, homeowners insurance, and HOA dues) should not exceed 28% of your gross monthly income. The "36" is the back-end ratio: all recurring monthly debts — housing plus car loans, student loans, credit cards, and other obligations — should not exceed 36% of gross monthly income. Lenders check both ratios and cap your loan at whichever produces the lower monthly payment, since it is the more conservative constraint.

Qualification depends on the lender and loan type. Conventional loans typically cap back-end DTI at 36%, though some allow up to 45–50% with strong credit and reserves. FHA loans allow back-end DTI up to about 43–50% in many cases. VA loans generally use a 41% guideline. This calculator uses the conservative conventional guideline of 28% front-end / 36% back-end, which gives a realistic, bank-friendly estimate rather than the maximum some lenders might stretch to. If you have excellent credit or a higher down payment, some lenders may approve you for more.

Yes, directly and in two ways. First, a larger down payment reduces the loan amount needed for any given home price, lowering your monthly principal-and-interest payment. Second, because property tax and insurance scale with the total home price rather than the loan amount, a bigger down payment means more of your fixed housing budget can go toward principal and interest instead of tax and insurance on financed value. In the calculator's formula, the down payment appears in the numerator (reducing the tax burden financed) and adds directly to the final home price (maxLoanAmount + downPayment), so every extra dollar down increases your max home price by more than a dollar.